topic DEBT vs DEBT!! in General Credit Topics

DEBT vs DEBT!!

MM1234 — Wed, 02 May 2007 17:58:44 GMT

I guess ALL debt is kinda related to credit of some sort so I hope its ok to post here.

I was wondering what you all think about GOOD DEBT vs BAD DEBT. I was reading some Suzy Orman articles and some Dave Ramsey Articles and read that Mortgages and School Loans for your kids are "GOOD DEBT" and Credit cards and Car payments "BAD DEBT".

Im almost CCard Debt free, No Car Payment and no other loans.....and was wondering when I buy a house am I no longer Debt free. I guess its ok to have debt for a house.

Just wondering....

Re: DEBT vs DEBT!!

Anonymous — Wed, 02 May 2007 18:15:56 GMT

All debt is bad LOL

Any debt that can give you equity or a profit can be cosidered good debt

Student Loan ( equity in yourself)

Car loan

Mortgage

Any debt that just eats away from you fiscally is bad debt

Credit cards

credit cards

store cards

charge cards

credit cards

did I mention credit cards. ( though some will agrue that good credit card history is good for your credit score but overall it can drain the life right out of you financially, so overall it's bad debt)

Loans for no purpose but just to use to raise your credit scor.

Re: DEBT vs DEBT!!

Anonymous — Wed, 02 May 2007 18:51:52 GMT

Boswd, didn't you mention being a Dave Ramsey fan in another thread? If not, my mistake....must have been someone else. Dave would spank you for calling a car note "good debt." I think a good goal is 100% debt free but your mortgage in an ideal world. Unfortunately, most of us need reliable, safe cars and finance education, etc. I think Boswd is right though. I only keep my card accounts open for FICO purposes, under 10% util.

Re: DEBT vs DEBT!!

Anonymous — Wed, 02 May 2007 19:25:05 GMT

I am a Dave Ramsey fan but he does have some quirkey ways about him too. He is spot on on how to get yourself out of Debt. Somethings I don't agree with totally is that not having ANY credit cards, which I think everyone should have at least one just in case something comes up and his take on cars. He has some good points but in most cases you need a car loan and having a car does give yourself an asset.

Re: DEBT vs DEBT!!

Tuscani — Wed, 02 May 2007 19:25:43 GMT

I would have to say car debt is about the worst! LOL

Nothing like investing as much as we do into a deapreciating asset.

Re: DEBT vs DEBT!!

Anonymous — Wed, 02 May 2007 19:38:19 GMT

yeah I guess your right, it is an depreciating assest

Ok I'm changing auto loan from good debt to bad debt

Re: DEBT vs DEBT!!

smallfry — Wed, 02 May 2007 21:13:33 GMT

I've listened to Dave Ramsey on the radio. He makes good sense when he talks about becoming debt free but when he tells the Average Joe or Jane just to put their money in a mutual fund and leave it there he does them a grave disservice. Nothing goes up forever. Look at real estate. Rant off.

Re: DEBT vs DEBT!!

Anonymous — Wed, 02 May 2007 21:16:37 GMT

Yeah Like I said, when it comes to his getting debt free program, there is no one better in my opion, on some other topics, eehhh, I understand what he is saying and why, just don't totally agree with it.

Re: DEBT vs DEBT!!

Anonymous — Wed, 02 May 2007 22:13:00 GMT

I agree with Dave 100% in principal. Unfortunately, it's not my reality. I want to buy a house without getting jacked. Manual underwriting or not, if you don't have some good credit history it's doubtful you'll get prime. And as we all know....to have credit history you have to carry debt. Oh, the irony.

Re: DEBT vs DEBT!!

Anonymous — Thu, 03 May 2007 05:02:21 GMT

If you're driving 40 miles each way to and from work, and you're the sole bread winner, a car loan might well be good debt in that it is helping put food on your family's table.

If you're netting $5,200 a month, and you take a subprime home loan with a $2,800 PITI payment, there's a good chance it's gonna turn into bad debt.

Playing semantic games doesn't serve a lotta purpose. Everyone's situation is different.

Re: DEBT vs DEBT!!

Anonymous — Thu, 03 May 2007 07:38:14 GMT

One aspect of all debt "good" or "bad" is that it is a bet against the future. When you take on a debt, you're betting that you'll make enough money to repay. You're betting that Old Man Murphy (you know, of Murphy's Law fame) will ignore you and not send misfortune your way.

I generally think debt is bad. I'm not going to say every debt in every circumstance is bad, but from my perspective it seems most misfortunes in my life have coincided with taking on unwise amounts of debt.

Re: DEBT vs DEBT!!

Anonymous — Tue, 10 Jul 2007 04:44:09 GMT

I agree with NewWorldMan. Most folks will have a period of time in their lives where they will suddenly find themselves without an income--or a marked decrease in income. Could be many things causing the loss--layoff, severe car accident, serious medical illness, death of a spouse, an act of terrorism, or many other scenarios.

One thing remains the same, debt will not be a friend in these times. Debt is spninding your money b4 you get it. Sometimes it's best to save up for a big purchase, instead of just charging it!