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Personal Finances / Credit Cards and Consumer Debt


Subject:  Re: Balancing debt vs Investing Date:  12/31/2012  7:00 PM
Author:  yeilBagheera Number:  306571 of 312858

Let me turn "what would be good debt" into
an example of bad debt

spending money you don't have with nothing to show for it
say, running up your credit card debt on junk food that bloats your body

Then you have months paying interest on the debt, long past any enjoyment of what the spending brought you.

Sometimes, in favorable housing markets, a mortgage is a good debt, because you can sell the house for more than you agreed to buy it for, thus getting rid of the debt obligation when you move. (wistfully thinking of my childhood in the suburbs: Dad bought a house that was 4x his annual salary, they paid the same monthly payment through twenty five years of inflation, and then sold it for more than 10x the purchase price)
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