Debt decreases your stock value, so it makes it easier for opponents to buy you out. So having too much debt leaves you really vulnerable in the late game. I am not sure how much the AI does take advantage of it, but I assume players can buy your stock more effectively.

Debt has two major consequences in the game:

- Lowers your stock price. This is the big one. If people are able to buy you cheap, then you'll get bought out earlier. This is the risk of running a lot of debt early - players can pick up your stock for $4-5k which can help them buy you out later in the game. (Or they get a payout.)

- No profit from power or pleasure dome. The money you're making from power and the pleasure dome go to pay off your debt first, so you're still making the money, but it's not liquid. If you're able to make the money as actual cash that you can use to buy things (other than auctions) then you can get ahead in the game.

-Scott-

What do you mean "You get a free claim for 3K" ?

I found that your level of debt is not only something that is subtracted from your net worth in the calculations that determines your stock price, it is multiplied by 4 before it is subtracted. A large debt can hurt quite a bit. And it grows by 10% per night. A lot of debt is something that has cost me many games. Learning how to control my debt is something that had lead to great improvements in my game play.