Good Debt

I bet you never knew there was such a thing, right? Well, before you go running to the mall with your credit card in hand, read about the four types of good debt and how they can help your financial future to become brighter. And sorry to disappoint you, but maxing out your credit card on new clothes isn’t one of them!

When it comes to good debt, consider what your needs and wants are. You need to get an education and you need medical care. You don’t need a new designer bag or a flat screen TV. Recognizing the difference between good purchases and bad purchases will help you understand what the definition of good debt truly is.

A student loan- although it may seem overwhelming once acquired- is a good type of debt to accrue. Why? Because it contributes to your future success. It will increase your level of education and provide you with the means to earn a larger income in the future.

A mortgage loan will allow you to build home equity and net worth- which will help you to make larger purchases later for things like vacations, a new vehicle or remodeling.

Medical bills are good debt because your health always comes first. Never sacrifice your health for the sake of saving a few dollars.

And last but not least, any business debt you acquire is good debt because it is helping to secure your future financial success.

Previous: Chapter 13 in a Nutshell
Next: The Truth About Credit Consolidation