What is good debt and bad debt?

Borrowing money, either through a credit card of loan can help build for the future, or can lump us with debt that is difficult to repay.

Good debt finances assets that appreciate in value or provide an income stream – a home; an investment property; shares; managed funds; a business. The interest cost is generally tax deductible.

Bad debt is associated with spending on things that will have little value in the future like holidays; clothes, eating out, groceries.

Source: Bankheadlines.com.au

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