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What type of borrower are you?  

Understand your borrowing habits and make smarter choices

Your borrowing habits can have a big impact on your financial wellbeing, whether you use credit for essential needs or optional purchases. This page explains the difference between healthy and risky borrowing, how habits develop and how to make smarter decisions using CCPC budgeting resources so credit supports your goals instead of adding to debt.

How do you make credit work for you, not against you?

For many people, borrowing is part of everyday life, but how and why you borrow can shape your financial future and wellbeing. We at CCPC want to help you understand your borrowing habits, spot the difference between healthy and risky debt and learn how to make credit work for your goals, not against them.

What’s the difference between healthy and unnecessary debt?

Jim from Co. Cork shares:

“It was a challenge to get the mortgage I needed to buy my house. But yesterday, I was ordering a takeaway, and saw the option to ‘Buy Now, Pay Later’. My order wasn’t big enough, so I added extra sides and desserts to hit the €30 minimum. It felt easy – no upfront payment, no interest. But when the payment came due, I cringed. I’d spent more than I normally would. It didn’t feel like real money at the time, but it definitely did when it came out of my account.”

Does Jim’s experience sound familiar? It highlights the difference between necessary debts (like a mortgage) and optional, often unhealthy debts. The way you pay for what you buy can have a big impact on your financial wellbeing.

Check the information below to understand what type of borrower you are and how to make the most of the credit options available to you.  

Are you borrowing for the sake of it?

Sometimes, stress, boredom or even peer pressure can also lead people to borrow for the sake of it rather than out of real need. Our brains are wired for instant gratification, and advertisers know how to encourage us to spend. 

You may be borrowing “for the sake of it” if:

  • You use your credit card to buy things on credit instead of paying your balance in full each month, even though you have the money.
  • You spend more on optional goods and services than you would if credit wasn’t available.

These debts are usually considered unhealthy because they’re expensive, may involve hidden fees, and the benefit is often gone before you finish paying.

What are the risks of unnecessary borrowing?

Buying on credit can feel convenient, but it’s easy to lose track of what you’re spending. If the purchase isn’t essential, the costs can add up and make it harder to reach your financial goals. Check the following sections to learn more about these costs and risks: 

How can you be a smart borrower?

Smart borrowing means using credit only when necessary, shopping around for the best deal and keeping your finances on track. Look at the actions of a smart borrower: 

  • Borrows only for goods or services important for future wellbeing, like education or a home (also known as “healthy debts”)
  • Shops around and uses the CCPC  Loan comparison tool to find the best offer
  • Keeps track of credit and switches when a better deal is available
  • Tries to save before buying (save now, buy later) to avoid interest and fees
  • If using credit for non-essential items, shops around for the best value and plans for repayments so none are missed

What resources are available for smart borrowers?

Even with the best intentions, comparing offers can be difficult. Use these resources to make smarter choices and save money:

What if you need to borrow out of necessity?

Anyone can face financial difficulties. If you don’t have enough savings or income, you may need to borrow for daily expenses, which means paying extra for credit. Getting support early can make a big difference. For more information from CCPC, learn how to tackle your debts.

Alternatively, if you’re in urgent financial difficulty, contact the Money Advice and Budgeting Service (MABS). MABS is a free, confidential and independent service that helps people in Ireland manage debt and take control of their finances. Their advisers can help you:

  • Review your debts and make a realistic budget
  • Check if you’re missing out on any entitlements
  • Contact creditors and negotiate affordable payment plans on your behalf
  • Explore solutions for mortgage arrears or serious debt problems
  • Access practical tools and information to help you get back on track

You can get support from MABS online, over the phone or in person at one of their local offices. They’ll listen without judgement and help you find the best way forward for your situation.

How can you tackle your debts?

Watch the CCPC Money Clinic video: What does a bank look at when you apply for a mortgage?

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