Posted on May 28, 2009 at 3:19 pm It sounds crazy, but think about it- there are definately good debts as well as bad debts. For example, a credit card debt with a high interest rate is, most likely, a bad debt. Now, a credit card with a $0 balance and low interest rate is most likely a good debt. Not to mention that by making all of your monthly payments, and not having a balance, you are in effect improving your payment history and debt to income ratio, the two largest parts of your credit score! While credit cards are unscured debts, this theory can also be applied to secure debts. For example, if you have a mortgage, that is a good debt, since it means that you have a home! Or, a car note for example can be a good debt because transportation is necessary in the majority of people's every day lives. Can anyone else think of why debt may be a good thing?

Posted on May 28, 2009 at 6:59 pm Ok, I see where you are going with this. But let me ask you a question- what about someone who has a mortgage but is behind 3 months on payments? Do you think they would consider their mortgage a "good debt" at that point in thim? I'm not so sure. I do believe those things can be "good debts" for people who have consistent financial stability. But in the midst of an economic downturn, many people lack that stability and find themselves in this sort of position.