What is good vs bad debt? Based on Google Trends, this question is something that numerous people want to know.
Good Debt is something that appreciates in value, provides a monthly return, or is extremely low in interest.
Good Debt:
Rental Property
Business Investment
Credit Cards (When Used Properly)
Debt that pay for themselves and don't cost any money out of pocket.
Bad Debt:
New Car Auto Loans
Student Loans
Primary Mortgage
Credit Cards (If Used Improperly)
Any Debt that depreciates in value and causes monetary loss of income.
With anything, its not about what you buy it is more about how you will utilize what you buy, Real Estate is a perfect example, Buying an expensive house for yourself is Bad Debt because it causes giant monetary losses per month to your income, however if you rent it out its Good Debt because it is paying for its self and causing no excess expenses from your income.
