Good Debt Vs Bad Debt. Eliminate Bad Debt

Did you know that the average American household is in credit card debt over $8,000? Did you know the leading reason for divorce is because of a financial situation? Did you know that over 1 million people file for bankruptcy every year? Most people are in debt because they donâ t know any better, they are just uneducated.

So what are good debts and what are bad debts. Well bad debts are anything that loses value the moment you purchase it. The best example would be a car. Cars constantly depreciate everyday. Buying any consumable products on credit is bad debt. Consumable products are those that are used up and then need to be replaced. Example would be food, clothing, and cleaning supplies.

Isnâ t it just so easy to get that in store credit card offering you no interest for 6 months? Well chances are you wonâ t pay it off by the end of the no interest period. Be careful of the â save 15% today when applying for our credit card.â When you see that you should know everything you buy on that card is bad debt.

Good debt is that which what you purchase will over time make you money. The best example is real estate. Most of the time property appreciates its value. Also some interest is tax deductible. Thatâ s a win â " win situation. Buying collectibles, house, and advertising on debt can mostly be considered good debt as long as it makes you money.

Be smart and look at the long term affects of your decisions. Budget and planning will also help you overcome debt problems.

Learn more about debt and how to get out of it here.

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