UnThreaded | Threaded | Whole Thread (30) | Ignore Thread Prev | Next
Author: joelcorley Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 308462  
Subject: Re: The Plan Date: 1/28/2014 9:27 PM
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Recommendations: 2
FlippoHip,

You wrote, I really hate that I have the credit card debt. The loan...well, that was for something that I felt good about.

Many people associate debt with the thing that was acquired with the proceeds. It's fuzzy thinking and its wrong.

A debt is a debt regardless of how it was acquired. Neither good nor bad. The only measures of a debt are the terms. The most important term is usually the interest rate. Other important terms may include tax deductibility, promotional periods, variability of the rate, whether it was secured by property and whether the loan is one-time or a revolving line of credit. Except for the tax issue, these other terms affect risk associated with the loan and are features you can use to discount (or add a premium to) the cost of that loan. Most such risks (and the tax savings) have subjective value, meaning their value will vary by the situation the individual is in.

However for a rough comparisons, interest rate is usually good enough. Only when rates are similar do these other terms tend to become important. This is true even when comparing credit cards, personal loans, car loans and mortgages. They're all just debt.

- Joel
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Print the post  
UnThreaded | Threaded | Whole Thread (30) | Ignore Thread Prev | Next

Announcements

TMF Credit Center
The Motley Fool Credit Center arms you with real tools and simple messages, that will help you in every credit situation.
What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Community Home
Speak Your Mind, Start Your Blog, Rate Your Stocks

Community Team Fools - who are those TMF's?
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and "#1 Media Company to Work For" (BusinessInsider 2011)! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.
Advertisement