Understanding Good and Bad Debt

Which of the following is considered good debt?

• Financing a new wardrobe

• Using a credit card for a vacation

• Taking out a student loan for education

• Buying a luxury car with a loan

What is a characteristic of bad debt?

• It helps you build equity

• It is used for investments

• It involves high-interest rates

• It generates long-term benefits

According to the video, what should you consider before borrowing money?

• Whether the debt will help you grow or hold you back

• If the interest rate is below 5%

• If it is recommended by a friend

• Whether you can pay it off in a month