[SarahSays]

I suppose that good debt would be opening a charge account and paying off the balance in full every month to establish credit. Other than that, is there such a thing as good debt?

[Mary]

I think I've heard that good debt is like the mortgage on a house because there is a tangible asset that is backing up the amount owed.

[couponaholic]

Exactly, Mary. Good debt is when you are purchasing an asset. Assets are anything that goes up in value or at least holds its value for a long time. Any kind of real estate is almost always good debt. Bad debt is when you use a credit card for consumables or even getting a car loan.

[crashingup]

I think there is good debt, specifically buying an asset, either a home or equipment for a business, which can give you a return on your money or at the very least not depreciate in value. Getting into debt to buy anything that depreciates in value is always a bad idea and comes back to bite you in the long run.

[UmiNoor]

In my country, the government provides a way for people to buy shares in a government trust fund and then earning dividends every year. People buy these shares through a bank and paying back the bank monthly. I think this is good debt because annually the debtor gets dividend from the government.

[Derkler]

As far as I'm concerned, there is no such thing as good debt. Debt simply means that you are in a position where you owe somebody. And if you are somehow unable to repay that debt - no matter if the purchase in question is an asset - it can put you in a bad spot. If you can repay any debt, no matter how great or small, please pay it off. You will forever be someone's slave if you constantly owe THEM money. Never let anyone convince you that it's OK to be in debt. People will never know true freedom until they free themselves from debt.

[pieface]

Yes, you can have good debt if you use your credit card for everything, pay your balance on time, and reap the cash-back bonuses. It's also important to carry a little debt from time to time to establish credit.

[Pegs]

I agree with the others who have said buying a house or paying off credit cards every month is good debt. I have friends who have a credit card that accrues airline miles. They use the card for everything and pay it off every month. Once a year, they have enough miles for two tickets to Europe.

[cookiemonster]

That is the only good debt that I know of and I had to do that before. Rebuilding credit is not an easy task, I was stuck with a huge bill and it took me a little more than a decade to clear everything up.

[SaveAbuck]

I consider our home to be good debt. Although we still have a mortgage on it, the value of our property has risen no end. If we were to sell we would easily be able to clear our mortgage and have a good lump sum to retire on.