Is there really such a thing as "good debt"? Actually, there is.
Good debt can be things like getting a mortgage loan, a student loan, or a small business loan. Bad debt includes payday loans, car title loans, vacation loans, some credit cards, and any other loan that has a high interest rate and on which you do not pay the entire balance each month.
With all debt, make sure you know and understand the terms, conditions, and fees that may apply. This is especially important when you apply for a credit card, which has terms that can change at any time and according to the issuer’s wishes.
Whether you obtain “good” debt or “bad” debt, educate yourself on each and make sure you read the fine print on any loan application before you sign. Also, weigh the costs and benefits of obtaining the loan and make sure that your budget can handle the monthly payments.
Learn more about balancing credit and debt by visiting the Interactive Tools page at the Andrews Federal online Education Center.
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