Planning tip: Defining good and bad debt - MoneySense

Planning tip: Defining good and bad debt

Debt is a four-letter-word, but it doesn’t always have to have negative consequences.

  37

by

  37

91522830
Debt is a four-letter-word, but it doesn’t always have to have negative consequences. If you haven’t heard already, there is a difference between “good” and “bad” debt.

Good debt is money you borrow for things that rise in value, such as a house, education or investments such as mutual funds. Bad debt is money you borrow for things that quickly decline in value, such as a vacation, entertainment or clothes.

Pay off bad debt first before attacking good debt. Why pay extra interest on something that’s no longer providing a benefit?

Comments are closed.