This is an excellent review of good-debt-vs-bad-debt from Personal Finance News from Yahoo! Finance.
I’ve always thought that Debt is like a chain saw: if used correctly, it’s a powerful tool; if used unwisely, it can be incredibly dangerous.
I hope you find this interesting.
Debt is a concept as intricately intertwined with America these days as baseball, Mom and apple pie.
The amount of personal debt in this country is ever-increasing, and a large part of the reason is that credit has never been easier to get. Whereas credit card issuers previously looked for customers who could repay, today card issuers relish the chance to reel in those who’ll continuously charge beyond their means at 18 percent or 20 percent.
But debt is a complex concept. Not all of it is good — a fact a surprising number of Americans fail to realize until they’re in the hole — and yet not all of it is bad. When used intelligently, debt can be of tremendous assistance in building wealth.
One of the secrets, therefore, to being smart with your money is to differentiate between good debt and bad debt. While the differences often seem logical, it is a logic that apparently is missed by many Americans.
“When you buy something that goes down in value immediately, that’s bad debt,” says David Bach, CEO of Finish Rich Inc., and author of “The Finish Rich Workbook.” “If it has no potential to increase in value, that’s bad debt.”
Read the complete article here: good-debt-vs-bad-debt: Personal Finance News from Yahoo! Finance.