topic Re: Is all debt bad? in Debt management

Is all debt bad?

RentGuru2018 — Wed, 21 Mar 2018 02:57:40 GMT

Is there any kind of debt that's good to use? Or should I always stay out of debt? Never get a credit card or take out a loan?

Re: Is all debt bad?

WJMcCalpin — Wed, 21 Mar 2018 18:15:15 GMT

I've always heard that you should take out a loan or get a credit card, just so there's something on your credit report...that is, someone with no credit history might get as bad a credit rating as someone with a bad credit history.

Is that still true?

Re: Is all debt bad?

LudwigVan_fan — Fri, 23 Mar 2018 00:55:31 GMT

Not all debt is bad. Some debt probably can't be avoided. Also, utilizing some debt establishes a credit rating which is necessary these days.

Using credit card debt is not necessarily bad. If you use them responsibly, (by having a plan to either pay it off entirely each month, or, have a plan to pay off in a reasonable amount of time to minimize finance charges) they might be a good use of funds.

Also, buying a vehicle or home might only be achievable by taking out debt. Not that many people can pay cash for vehicle(s) and/or homes.

Re: Is all debt bad?

EricG — Fri, 23 Mar 2018 22:13:09 GMT

I agree with - not all debt is bad and you just need to use it responsibly.

My advice is to make sure you find out what the interest rate is and what the terms of the loan/ credit cards are.

The interest rate is usually called an "APR" - annual percentage rate. This site has a good explanation of what that is and why it matters. Essentially it's what you're going to pay to borrow money.

Here's a quick example:

The loan or credit card has an APR of 15%.

You borrow $100.

At the end of the term (1 year in this example), you'd owe the original $100 plus $15 for $115 total.

That extra $15 comes from the original $100 multiplied by 15% (or 0.15 - another way to write 15%).

That's a very simple example and most loans and credit cards charge compound interest - where interest is multiplied by the new balance each term. This kind of interest, compound interest, can grow VERY QUICKLY!

So be sure you know the interest rate, aka: APR, and the terms - how often the interest is charged.

This is also a decent intro video to the idea.

Re: Is all debt bad?

s44k — Sat, 07 Jul 2018 17:47:40 GMT

You should avoid debt as much as you can, but using credit card wisely can help with credit score. The way I do it is by setting up automatic statement balance payoff for each of my credit cards online from my bank. I use YNAB as my budgeting software to ensure all my expenses can be covered with Cash, both long term and short term. So I always know I’m able to pay off credit cards in full each month. By paying off all my credit card balances a few years ago and using this strategy, my credit score increased from 632 to 800+. I still have Student Loans though which is another story and I’m trying to end that story as soon as I can. I also use credit cards that gives me cashback or airline points. So nowadays, I pay no interest to credit cards and instead get paid back for using them regularly.

Re: Is all debt bad?

Carl — Tue, 10 Jul 2018 14:25:53 GMT

It's a personal choice. I gave up all credit cards about 8 years ago, and have never been happier or more at peace since. In that time I've managed to pay off two cars. Having replaced one of those cars 4 years ago with a brand new 2013 Rogue that I paid cash for means I still own two cars free and clear. Also in that 8 years I"ve managed to pay off 1 of the three rentals I have mortgages on. Was great when the insurance company sent me a yearly insurance bill with a 10% increase and I was able to tell them "stick it where the sun don't shine" which promptly resulted in a 20% decrease in that bill.

With only my primary residence and 2 more rentals left to pay off (which is going faster with the rental income from the paid off rental and the fact I have no car payments or credit card payments) I'm looking at being debt free in the next 5 years or so.

I'm tired of working for money and just handing it over with exorbitant interest to lenders. I don't have a problem with paying my share of taxes. But if I'm going to pay taxes on the money my earn, I want to pay taxes on the money I "KEEP", and not the money that is spent before I've even cashed the paycheck.

Re: Is all debt bad?

lesbontempnola — Sat, 15 Sep 2018 03:26:45 GMT

Is there any kind of debt that's good to use? Good debt is Student Loans, Mortgage Loans, and Credit Cards. Student & Mortgage Loans are Installment accounts which is a MAJOR part of your credit report.Credit Cards are Revolving Accounts which is another major part of your credit report.
Should I always stay out of debt? If you are alive you will incur some type of debt. Key thing is to be responsible.
Never get a credit card or take out a loan? While it's certainly possible to do so, you won't have a good credit mix on your report. Creditors use this info to see how responsible you are worth OTHER PEOPLE'S MONEY. If you demonstrate responsible behavior, they will consider you a GOOD risk and won't hesitate to lend you money.

Re: Is all debt bad?

BassGod00 — Wed, 19 Sep 2018 19:39:44 GMT

Just never get a credit card until your credit is excellent.

Re: Is all debt bad?

Robert-Cohen — Tue, 25 Sep 2018 22:56:55 GMT

No by all means get a credit card, but until the scum banks and the scum credit agencies differentiate between purchases and balances don't use it. My credit score is 797. Using the hypothetical tool on Chase's website if I purchase 5000 in the month my score goes down 50 points. Since I pay my bill at the end of the month, why charge, just pay. When the banks want the 2.5% on purchases from me, they can do it my way. Probably won't happen if it's only me. When all of you stop being sheep, it will happen

Re: Is all debt bad?

lesbontempnola — Fri, 05 Oct 2018 05:02:39 GMT

No.
Debt is necessary. However the amount of interest you pay is totally up to you. The creditors set the APR, however your payments dictate how much interest you actually pay.

Re: Is all debt bad?

CPK — Sun, 14 Oct 2018 03:05:05 GMT

It all depends. If you are like most who are only focused on having a high credit score then all debt is good. A credit score is a person's relationship with debt. Debt keeps you from saving money. There are people with an 800 credit score but have no money in the bank. Even though they have a good salary it gets eaten up by payments they have to make each month on credit cards, car loans, and other consumer debt. In my opinion debt is never a good thing. Financially speaking life is easier when you don't have to pay the bank or credit card companies every month. You will have a healthy emergency fund and you can save up for things you want instead of financing it or using a credit card. If you have debt pay it off as fast as you can and never go into debt again. Mortgage debt is understandable, but even in that case get a home that is within budget and put down as much as you can. I would do my best to avoid debt. I hope this gives you another way of looking at it.

Re: Is all debt bad?

Robert-Cohen — Thu, 10 Oct 2019 13:48:47 GMT

According to how this works, all credit card debt is bad. The understanding used to be that carrying debt and not paying off the balance is bad. Now it's how much you spend. I pay my card off in full every month. If I spend more than 3500 of the 7000 max, my credit score dips 50 points and then the months where my spending is 1500 or less, I get it back. You would think they would want you to spend as they make roughly 2 % on each purchase.
Edited.

Re: Is all debt bad?

CreditDragon — Wed, 14 Nov 2018 22:09:17 GMT

CC debt can be good to help boost your credit as well as some auto loans for people who are just starting out with no credit. You can do a secured card where you give the bank $200 and then they give you a credit card for $200 and then as you use it responsibly they up your limit and eventually you can get your money back.

Your credit score is factored off of how much of your credit balance you use. You want to carry a balance of less than 15% of your CC availability to get the best rating out of it that you can. So don’t spend you limit and make minimum payments that actually hurts your credit.

You only pay interest on your balance! So if you spend $50 on gas for the month in your CC but pay it off before your bill is due, you don’t accrue interest and you use your CC which is good for your credit.

Vehicle loans can also help build credit but you shouldn’t run out and buy a $20,000 car with a $20,000 loan. Save 70% of the car you want and then finance the remaining 30% it will help you have smaller monthly payments and help you pay it off faster and still have equity in the car. This will also help your credit. I’m 27 and have a 760 credit score because I pay off my credit cards every month and am never late on payments

Re: Is all debt bad?

lesbontempnola — Thu, 15 Nov 2018 03:00:00 GMT

Two subjective terms here....
(1) never get a credit card
(2) excellent
Quantify excellent.
Explain rationale of #1 when one of the criteria for getting to excellent is Revolving (credit) debt.

Re: Is all debt bad?

PatL — Sat, 24 Nov 2018 12:16:53 GMT

Re: Is all debt bad?

PatL — Sat, 24 Nov 2018 12:18:08 GMT

No.
Yes.

Re: Is all debt bad?

Robert-Cohen — Wed, 28 Nov 2018 18:51:35 GMT

It used to be , if you carried debt, especially at credit card rates, you are in trouble. Now if you have a high balance, whether or not you pay it at the end of the month, it dings your credit. My answer is screw the banks and the credit services that enabled the crash of 2008. Wait until you can afford stuff and pay cash. Everyone except our bought and paid for government and our sneaky banks benefits

Robert Cohen

Re: Is all debt bad?

mint00community — Sun, 02 Dec 2018 14:45:34 GMT

Calling them scum isn't really helpful. Credit scores are a game, and you just need to learn the rules. Your example of the simulator is relevant for your situation, but you should put it into context. Someone with a $5,000 balance when their total credit limit is $10,000 will have severe credit score effects (50% utilization), while that same $5,000 balance for someone with a total credit limit of $100,000 will have minimal credit score effects (5% utilization). In your example, why not charge it, and if holding the balance at $5,000 is detrimental to you, then pay it down to $1 just before the statement closes. This gets you an actual reported balance on your credit files which helps build your credit history, and if you have a rewards card, lets you earn those rewards as well.

Re: Is all debt bad?

frogdev1 — Thu, 13 Dec 2018 05:17:24 GMT

Debt is not necessarily bad. Most people borrow to purchase a house or vehicle. What is bad is unmanageable debt: you are struggling to make payments. Most of your income is going towards debt.

A credit card and debt are not the same. If you use a credit card, and pay the balance each month, you are not in debt.

There are times when you must have a credit card. Renting a vehicle is just once instance where you must use a credit card.

Re: Is all debt bad?

DaveT315 — Thu, 13 Dec 2018 14:26:11 GMT

Definitely not. As a general rule, debt used to acquire income generating assets is good debt. Debt used to finance an education that will eventually land you a high paying job is good debt. Debt used to urchase your primary residence is a liability even though it was needed to purchase an appreciating asset. While not good debt, the debt used to purchase your primary residence or the car you use to commute to work is often necessary debt.

Debt used to finance a vacation or purchase things that are consumed (such as groceries) is not good debt. These debts may be needed when you are not in a position to pay cash for everything you consume, but the debt should be kept to a minimum and used responsibly. Credit card debt should be paid off in full every month, or as quickly as possible to minimize finance charges.

Since I am speaking in generalities, let me leave you with one more. Any debit used to support a lifestyle or maintain a status that is beyond your means to service is bad debt. You probably don't need the biggest house on the block in the most exclusive neighborhood. You don't need a luxury automobile to commute to work when a plain-vanilla, second-hand car will do the same job quite effectively. These things are status symbols and the debt used to acquire them could lead to a bankruptcy and/or foreclosure if you are unable to make the payments. I would put this debt in the category of bad debt.

Re: Is all debt bad?

ginger2ginger — Fri, 14 Dec 2018 12:39:30 GMT

Debt is a lot like alcohol. Some people can have it and treat it responsibly (pay off bills in full, pay down loans early, don’t take out more than they can afford.) others cannot. For the people that have mismanaged debt, it’s always bad. It needs to go away, and it should be avoided. For people that handle it properly, it’s still not good...how much do you want of your life owed to other people?

Re: Is all debt bad?

ginger2ginger — Fri, 14 Dec 2018 12:40:06 GMT

Debt is not necessary, and that’s a pitfall illusion.

Re: Is all debt bad?

J3SPAULDING — Sat, 29 Dec 2018 02:52:59 GMT

Yes. Live debt free puts money in your pocket. Credit score only shows how good you are giving money to others.

Re: Is all debt bad?

Mlawrence523 — Fri, 04 Jan 2019 01:10:20 GMT

So I have issues with debt. What is my solution especially when I have hard times?

Re: Is all debt bad?

frogdev1 — Fri, 04 Jan 2019 01:40:48 GMT

"Issues with debt "means that you living beyond your means. Your spending is more than your income. You finance the difference between income and spending by borrowing. You are not paying off your debts at the end of each month.

Call it "hard times" or "emergencies" everyone has them. You must save, and build an emergency fund. For hard times (such as a job layoff), then you dip into your emergency fund.

Re: Is all debt bad?

Jake9544 — Mon, 14 Jan 2019 03:49:31 GMT

Yes, I recently bought a house, and went to multiple banks and got declined for a loan because I had no credit history even with a 702 score. Also I had 42k down payment on a 143k home

Re: Is all debt bad?

Robert-Cohen — Mon, 14 Jan 2019 03:55:21 GMT

I love these stories. How does one have a credit score without history. Failed mortgage applications always have a story. 1/3 down , 702, and an income of 2500/month buys that house, if there are no car payments, child support, or alimony

Re: Is all debt bad?

Jake9544 — Mon, 14 Jan 2019 04:17:16 GMT

I was answering how they.said credit history is just as bad as a low credit score. I am 20 years old and had a discover card for 4 months sorry I posted

Re: Is all debt bad?

Jake9544 — Mon, 14 Jan 2019 04:17:59 GMT

I was answering how they.said credit history is just as bad as a low credit score. I am 20 years old and had a discover card for 4 months sorry I posted it

Re: Is all debt bad?

alntoy2 — Mon, 14 Jan 2019 17:18:40 GMT

Jake,
if you got a 100 on a history exam does that make you an expert in History? No.
It's the CONTENT of the credit report that got you declined, not the score.
Also, where is the 702 coming from? Please don't say Credit Karma and these other so-called companies....

Re: Is all debt bad?

Jesuslovesu — Thu, 17 Jan 2019 03:27:53 GMT

A credit card is needed to rent a car, a hotel, etc. It is good to pay it off every month. If you don't have the money to pay for something, the credit card can be tempting and get you into trouble. The longer it takes to pay it off, the more you pay in interest to the bank.

Re: Is all debt bad?

Zeroloki — Mon, 21 Jan 2019 00:06:44 GMT

Keep at least a basic credit card and use it for fuel or minor things. I consolidated everything and had no loans or credit for fifteen years. No credit or loans hurt me in the long run re- establishing a credit score again even with banking institutions.

Re: Is all debt bad?

Jcaryl — Tue, 22 Jan 2019 04:27:25 GMT

My wife and I both have the same remarks on our credit records. We both have union construction jobs making very good money. 5 years ago we went through a difficult time which incurred a lot of medical bills a few of which went to collections. We paid them off together, at the same time and applied for a credit card. She was accepted for $3700 in credit limit between two cards. I was declined. Since then I was able to get a credit card for $300 but have been declined for anything else. My credit score remains at 580 and hers is over 700. What gives? Is there something on my report that i can't see? Our money is in a joint account and we're share all bills. Our dti is 24% and we have 2 months worth of bills in savings. I am at a loss of what to do.

Re: Is all debt bad?

alntoy2 — Tue, 22 Jan 2019 08:05:11 GMT

See my responses in Brackets []
My wife and I both have the same remarks [no two credit remarks are the same] on our credit records. We both have union construction jobs making very good money [amount you make is irrelevant]. 5 years ago we went through a difficult time [sorry for your troubles] which incurred a lot of medical bills a few of which went to collections [collection paid or not is just an indicator that you can not meet your obligations]. We paid them off together, at the same time and applied for a credit card. She was accepted for $3700 in credit limit between two cards. I was declined[see, told you, if you had the exact same remarks you would have had the exact same response]. Since then I was able to get a credit card for $300 but have been declined for anything else [stop applying]. My credit score remains at 580 and hers is over 700[from this point forward I ask that you forget about scores, yet focus on Content of the credit file. Lenders don't lend based on score, they lend based on what's in the report] What gives [content of report is what gives]? Is there something on my report that i can't see [go to Experian.com and sign up for free account. You can see score and content and score factors, YES ITS TOTALLY FREE!]? Our money is in a joint account and we're share all bills. Our dti is 24% [[good, get it down further] and we have 2 months worth of bills in savings. I am at a loss of what to do [good credit is a game of patience and restraint. Keep account utilization below 29%. Well, that # works for me. Your multiple inquries show you are high risk for non-payment. I've learned that you have to demonstrate responsibility with what you have ($300 limit) before you will be trusted with more (higher limit). Good luck.

Re: Is all debt bad?

Jcaryl — Tue, 22 Jan 2019 20:28:18 GMT

Thank you for your reply. Let me assure you that my wife and i have been together 12yrs and have all joint accounts with the exception of the recent credit cards simply because I was rejected. We have printed all three reports and viewed them side by side. Unless there are things which creditors can see and I cannot, our bureaus are the same. Since her acceptance for credit her score has jumped 149 points and mine has remained a dismal 580. The only thing I can guess is it might have something to with my son who has my name. But again, there is nothing that shows on my report. I am considering getting a lawyer to try and help me with this depressing situation. If that doesnt help then i guess i will throw in the towel and be happy using cash only like i have for the past 25 years. Buying a house is not worth the stress of these past 2yrs. And if cc companies think Im going to pay 100/yr to have a plastic card in my wallet that i dont need they are dumber than they must think I am.

Re: Is all debt bad?

loupokami — Thu, 24 Jan 2019 18:05:45 GMT

Debt is definitely not bad... if it's managed correctly. That 3 digit number of yours that creditors, insurance, utilities, landlords and employers look at? That's basically a number that determines how good you are at being in debt and how well you manage your money or how responsibly or irresponsibly you spend. Debt isn't just good for you, it's necessary in today's world.

But debt is only good when you can promptly pay it back, otherwise the debt is only good for the creditor who makes bank off of the high interest you pay on it over long periods of time.

Re: Is all debt bad?

Moneymasternow — Sat, 26 Jan 2019 14:46:25 GMT

So true this happened to great uncle. He never had any debt or credit cards. We could not add his name to phone bill. He had no credit file.

Re: Is all debt bad?

Financial Guru — Tue, 29 Jan 2019 11:06:08 GMT

Credit cards are the best thing you can have IF you are responsible and strategize. My FICO score is 839 so I believe I am able to offer this advice as it has worked extremely well for me.

1. Only apply for cards that have no annual fee. You really only need a couple of credit cards. Do NOT use a debit card for anything except getting cash from an ATM (and only use your bank's ATM's so you will never be charged a fee).

2. While low interest rate is great, if using them strategically, the interest rate will not matter as you will never carry a balance.

3. The main thing you want to do is get a card(s) with the best cash back benefits.

4. Pay all bills possible using your credit card. Cell phone, vehicle/home insurance, internet, cable, utilities...everything. Typically you cannot pay your mortgage with a credit card.

5. Use your credit card for all transactions you make; restaurants, gas, entertainment, groceries, you name it. The year end summary is also a great way to see where you spent your money during the year.

6. I tend to make payments on my credit card(s) every couple of days. I only charge items I can turn around and pay off that same day. With that said, it is important to also have some sort of balance at the end of the billing cycle. However you would pay that balance as soon as your statement is posted/received. The reason for this is that your credit report needs to show you actually utilize your credit card(s) and the only way this will happen is by having a balance at the end of each statement cycle.

7. Now here is the best part! Every transaction you make with your credit card will earn you cash back. The cash back benefits vary from card to card, so do your research to find the best one for you. I personally use my cash back benefits to pay for Christmas. I let the amounts accumulate throughout the year, and come Christmas time, I typically have around $600 or more that I can use.

MY Recommended Credit Cards: If you are someone that uses Amazon a lot, then the Chase Amazon card is excellent!! You get 5% cash back on all Amazon purchases (this adds up fast at Christmas time), and you get 2% for gas station (includes gas and inside purchases), drugstore and restaurant purchases and then 1% on everything else. Of course this card also offers no annual fee.

Chase also offers a no annual fee Freedom Unlimited card that provides 1.5% cash back on all purchases. So I will use this card for everything except Amazon, gas station, drug stores and restaurants.

The above cards are the ones that work best for me, but if you travel a lot for example, you may want to use a card that offers miles. Again, do your research and find the best options for your situation. Just make sure there is never an annual fee and you never carry a balance beyond a day or two of your monthly statement being posted.

If you currently have high credit card debt (I did 20 years ago), then you MUST get those paid off and QUICK. Consider a personal loan to pay them off which will typically be much less interest, OR see about balance transfer offers from credit cards that often give provide 0% interest for some set period of time. In order to pay off high credit card debt, the key is discipline. Only make purchases for things you need, and delay your wants for awhile until you get your debt eliminated. Credit card interest is the worst as it is typically extremely high. This makes it difficult to pay them off, especially if you only tend to make "minimum payment" amounts each month. Doing this only leads to a vicious cycle that gets you nowhere close to paying them off. If you do nothing else, make as large as possible payments on highest interest cards, and then less so on your lowest interest card(s) until you get them paid off.

Being free of credit card debt is the most liberating feeling!! It's a huge burden off your shoulders. You can then begin making your cards WORK FOR YOU by never carrying balances and raking in the dough from the cash back offers.

I also have opinions on savings accounts (never put the bulk of your savings at brick and mortar banks such as Chase, Wells Fargo etc.

But I think I have made this plenty long as it is, so I will stop now. If I'm asked, I can elaborate on this in the future.

"You can't get out of debt while keeping the same lifestyle that got you there" - Dave Ramsey

Re: Is all debt bad?

MRJordan — Thu, 31 Jan 2019 04:00:37 GMT

Short answer is yes. Long answer is yes but debt is hard to avoid in todays world.

Today everyone, including your bankers, grocery store, car salesmen and even TurboTax is trying to sell you debt because they make a killing off of it. Think about how many offers for loans, credit cards and other forms of debt people try to sell you on a daily basis.

Credit cards, car loans and personal loans are terrible, just don't do it. Most of America is broke because of this kind of debt. These are all for things that depreciate in value sometimes as soon as you get it (like a car). Not only are you paying extra for it, it loses value over the term of the loan so you will never gain anything except a bill every month.

The "good" debt is debt for an item that appreciates in value. This is debt like mortgages, business loans, etc. Any sort of investment can be considered good and is sometimes unavoidable. Don't fall for credit card rewards because you don't make any good money off it and if you miss a single payment you aren't making any money off that.

Read financial adviser books. A good one is Dave Ramsey. He is radically anti-debt but he even concedes that not everyone can pay cash for a house or business venture (although this is the goal and if you save and invest right it is possible).

The best debt is no debt. If you want to raise your credit score use the auto-pay trick (put a monthly bill on a credit card and pay it off automatically every month). This will raise your score because it will keep a credit card open for a long time and show good money management. Don't buy into getting more cards you don't need or rewards.

Re: Is all debt bad?

Trebor12081968 — Thu, 31 Jan 2019 23:23:07 GMT

Kinda..... But bad credit is somewhat better than no credit at all! Be wise

Re: Is all debt bad?

Teamster282 — Thu, 31 Jan 2019 23:59:45 GMT

What is YNAB

Re: Is all debt bad?

Incredabro — Sun, 03 Feb 2019 13:02:56 GMT

No as long as you keep up your payments. live within your means. Start off with a small credit card about $250 and pay it in full every month. You will slowly see your credit rise.

Re: Is all debt bad?

Incredabro — Sun, 03 Feb 2019 13:03:57 GMT

Yes this is true

Re: Is all debt bad?

Robert-Cohen — Mon, 11 Feb 2019 02:27:46 GMT

I am sorry, people that are in charge that can change rules arbitrarily are scum. Additionally, the rules are not published but are reported to be an algorithm that's proprietary. I don't see anything fair yet

Re: Is all debt bad?

Keith — Fri, 15 Feb 2019 01:34:33 GMT

Nothing is good or bad, it depends on how it is used. I’ll use a car for an example. If you buy a car and you have to pay gas, maintenance, insurance, repairs, plus it’s depreciating in value as years and miles go up then that is a bad debt. However if you take that same car and get a low monthly car payment, low insurance, and great gas mileage then you can turn that car into an Uber that pays all the above costs and pays you then that is a good debt. I’m not an advertiser for Uber. I actually don’t do Uber because for my particular vehicle, the increased depreciation, maintenance, and gas mileage, I would actually lose money. My point, though, is debt that is a liability (pulls money out of your pocket) is bad debt regardless of whether or not it’s benefiting or harming your score & debt that is an asset (puts money into your pocket) is a good debt. Money always comes from someone and goes to someone so try to put yourself in a position where other people not only pay your debt, they pay extra and you have increased income. Even a lemonade stand has to pay for the powder, the pitcher, the cups (and technically the water) before the salesperson who is usually 5 years old actually starts seeing a profit. When you buy lemonade It’s a liability because you pay someone else. The person selling it is using an asset because they are receiving the money. School debt is bad debt because there is no guarantee you will ever be payed enough to pay off the debt plus extra to make it worth it. If you want to go to school join the military. Then school is free and the degree is an asset, not a liability.

Re: Is all debt bad?

Lisa1583 — Fri, 22 Feb 2019 16:30:36 GMT

Pues pienso que no todas ya que algunas deudas te ayudan a crecer siempre y cuando sepas sacarle el provecho

Re: Is all debt bad?

Firehart1000 — Sat, 23 Feb 2019 19:39:18 GMT

No technically there are some debt that's hard to get out of but remember the only way to get credit is to stay in debt just do your best to stay in debt that you can pay responsibley so you don't drown in it

Re: Is all debt bad?

Bob3 — Fri, 01 Mar 2019 23:11:38 GMT

Yes, why does anyone need debt? People in today's society think that you have to have debt to survive. It is a lie that creditors spend a lot of money every year to get us to believe. Save your money if you want to buy something. I'm a Soldier for a living with a single income, wife, kids and all of that and I am able to live debt free. If you check my credit score it says that there was no information and there might be an error. Still, I have a home, 2 nice cars and a life. Don't by into all of the marketing from creditors, find financial freedom.

Re: Is all debt bad?

Nrobinson95baby — Wed, 13 Mar 2019 19:51:12 GMT

Is there anyway I can get out of bad debt ? if so can you contact me and talk to me.

Re: Is all debt bad?

ReTruth — Fri, 22 Mar 2019 13:10:06 GMT

**Best Advice do not borrow what you can not payback. If you are not sure you can afford it. Don't do it.

The debt will reflect back good points if you make on time payments and complete payments.

The debt will also reflect negatives if you miss payments and/or do not pay off debt in timely manner based on a agreed due date.

Your Answer----
It is only up to you if its going to be good or bad.

Debt: is~ unpaid due balances
Credit: is~ award of paid balances

If you are in debt you owe money.

If you pay you debts owed on time to complete you have earned Credit.

In Return this Credit will allow you to have opportunity to buy more expensive things in a pale scale without the hassle of not having all the money upfront.

You earn this Credit into a score over years which accumulate trust with large amounts of money from banks and loaners that only you can borrow because of a reputable background of pay offs' on time and in manner.

Re: Is all debt bad?

Chanaysk16 — Sat, 30 Mar 2019 03:56:05 GMT

No, but if have hospital bills on your credit report its illegal to be on your report. Especially, if no one tried to get in contact with you. Any debt on your credit report os often to be illegal.

Re: Is all debt bad?

akhoney29 — Sun, 31 Mar 2019 19:41:38 GMT

I agree with Carl - this is the ticket! Great response, easy to understand and positive/proactive. Thank you guys for the breath of fresh air. Debt is manageable but you have to be on it to make it work for you, not the other way around. I'm working on that myself having just bought a new house with a bigger mortgage and wanting to do the yard, but don't want to get in over my head yet. I'm close to paying off my wedding ring and my husband's doctor bills. So close I can almost taste the raised beds and welcoming backyard paradise!

Re: Is all debt bad?

ReTruth — Wed, 03 Apr 2019 21:59:26 GMT

the system is rigged doesnt matter what you think. I was put in default atudent loan 2007. They have helped thousand except me. It is 2019 I have not seen a Tax Return in 12 years. There results lied and said now Im in default in 2015. According to law its suppose to stop after 7 years. But they lied and restarted it. PAY FULL ONLY FOR ALL THINGS **bleep** CREDIT **bleep** A BANK **bleep** A LOAN TRUST ME DONT SUFFER LIKE ME

Re: Is all debt bad?

mint00community — Thu, 04 Apr 2019 03:07:00 GMT

Why do you think it should stop after 7 years? Getting a student loan discharged is extremely difficult. See this article:

https://www.forbes.com/sites/zackfriedman/2018/06/18/bankruptcy-student-loans/#6cc61dc44f8b

Re: Is all debt bad?

ReTruth — Thu, 04 Apr 2019 03:15:19 GMT

FIRST OFF INTIUT U AND FISCAL AND DEPT OF EDUCATION TREASURY ARE PROVEN THIEVES. YOU PUT THAT INFO ON UR CRAPPY IRS TOPIC STATING IT STOPS IN 7 YEARS WHY DONT U ANSWER THIS... HOW IS 12 YEARS OF MY REFUND WHICH IS OVER 20,000 HOW IS THAT NOT ENOUGH FOR 10,000. YOU ARE RICH AZ F+++ WHY DO YOU EVEN ACT YOU CARE BUT US U.S. CITIZENS. SCREW A LOAN DONT DO IT

Re: Is all debt bad?

ReTruth — Thu, 04 Apr 2019 03:18:34 GMT

LOOK AT HELP ON TOPIC ON IRS IT SAYS IT. PLUS THEY HAVE TOOK OVER THE LOAN AMOUNT. THINK. IF I TOOK 12 YEARS OF YOUR TAX REFUND. SAYING YOU 10,000. BUT YOUR REFUNDS OVER 12 YEARS EQUAL MORE... DO YOU WANT TO BE IN THIS POSITION? I WILL GLADLY TRADE.

DONT GET A LOAN

Re: Is all debt bad?

Exlacop — Fri, 12 Apr 2019 21:23:50 GMT

Debt is definately bad. All debt is bad. But if your goal is a good credit score do 1 of the following. Have a trusted family member with open good credit add you as an authized user on 1 of their credit cards with good standing and low balance high limit. Or 2. Get a credit card and never use more than 9% of the limit always have between 1 and 9% used and always pay more than the minimum. Dont pay off to $0. Example $1000 limit card. Use between $10 & $90. If bill is $17 a month send $20 or $25. When paid off buy again. This will ensure max score every time.

Re: Is all debt bad?

Polno — Fri, 19 Apr 2019 22:03:08 GMT

Imho yes all debt is bad. The only thing that you absolutely need credit for is to rent an apartment at certain complexes. You can secure a homeloan with a zero credit rating. Think about it this way. How many millionaires have credit? Answer less than 25% . They got to be millionaires by staying away from debt

Re: Is all debt bad?

tlhawthorne11 — Sun, 21 Apr 2019 03:27:06 GMT

Not all debt is bad.

With regards to credit cards, paying your statement balance each cycle will boost your credit rating by allowing your credit limit to increase. The percentage of your credit limit usage greatly impacts your score.

Home and auto loans with on time payments will also body your credit score. I'm my opinion an auto loan should never be greater than 50% of your annual income. Home loans should be no more than 3 times your annual income.

Re: Is all debt bad?

Olya V — Fri, 17 May 2019 21:01:31 GMT

This is so impressive, Carl!

Re: Is all debt bad?

Godebt — Sun, 19 May 2019 00:55:09 GMT

Don’t listen to this person. Saying you will always have debt is like saying you will always fail or be overweight or be a victim, etc. You can decide to be debt free & change your life. It’s not easy. Read again, it is NOT EASY. But like anything worth doing, if you chose to take it on & stick with it, it will be one of the best things you will ever do for yourself or your family. Check out Dave Ramsey & never borrow money again because you don’t need someone else’s money when you actually have money!

Re: Is all debt bad?

nbob651 — Mon, 10 Jun 2019 00:16:19 GMT

I am just an average schmuck and I really don’t have any education for business - I have been around a while so here goes. I believe a mortgage loan for a home is well within the good loan category. A home is one of the best investments still. I purchased my home on a half acre plot of ground for $125,000 15 years ago and now it appraises for $289,000. That seems to have been a great investment. I also believe you should never buy a brand new car on credit. The moment you drive off the lot it drops in value. Yet if you purchase a two year old car the investment seems to hold better. I also believe investing in an education is well worth putting at least some of the cost on credit for your degree is still money in the bank. Your income will be much higher with a degree than without. This will sound impossible but between my 1/2 tuition and my teaching assistantship my Masters degree cost me about $5,000 on credit. I felt blessed several times over when it came to retiring because my Masters degree greatly improved my retirement income making my $5,000 investment feel like nothing. There is my two bits.

Re: Is all debt bad?

Ovey — Fri, 28 Jun 2019 21:49:22 GMT

Check out a guy named Dave Ramsey on podcast, YouTube, or his website. He's been a financial coach for a long time and has helped literally hundreds of thousands of people find financial peace. I've learned a lot from him personally and would definitely recommend getting his book "The total money makeover." Good luck sir!

Re: Is all debt bad?

Jewell — Thu, 18 Jul 2019 11:25:33 GMT

Re: Is all debt bad?

Jewell — Thu, 18 Jul 2019 11:28:47 GMT

Regarding is all debt bad, what is considered good debt other than homeowner ship.

Re: Is all debt bad?

DaveT315 — Fri, 19 Jul 2019 13:37:31 GMT

In general, debt used to purchase income generating assets is good debt. Debt used to purchase consumable items, or depreciating assets is bad debt. For example, debt used to buy an investment rental property that generates a positive cash flow is good debt. Debt used to buy a car, pay for groceries, or a vacation is bad debt.

Debt used to pay for education leading to a better paying job, career advancement and a greater income is considered good debt. Student loans for a degree in a field with no job opportunity or a very low paying job is probably bad debt. What kind of job will pay a philosophy major enough to live on and also pay off the student loans? The debt incurred to obtain a PhD is probably bad debt if you end up being a cab driver.

The debt used to purchase a primary residence is bad debt but necessary. A primary residence does not generate any income, but the debt service is a liability until the property is paid off. Now you may argue that the primary residence appreciates and you realize a profit (income) when you sell. In principle, I agree, but appreciation is not guaranteed and usually slow when it happens. If you hold the property long enough, you should realize some appreciation but consider that you are paying interest on your loan while the property is appreciating. If you hold the property long enough you might break even. For example, if the house you paid $100K for 30 years ago is now worth $250K you see this as a potential $150K profit when you sell. However, consider that you paid a total of $250K in principal and interest for 30 years to retire your loan, You just break even at best. There are a few real estate markets where this is not the case, but for most real estate markets, home ownership iis more expensive than renting -- especially if you sell and move in every few years.

Re: Is all debt bad?

Waynejuntunen — Fri, 02 Aug 2019 13:09:52 GMT

Taking out a mortgage is not a bad use of credit. However car loans are a huge waste of money. Car loans are a huge waste of money, live within your means. I made 32k a few years ago (not very much) I saved and saved and bought a 2k car. The following year I sold it for 1.9k and had planned for another car so I had already saved 2.5k. I was able to buy a 4k car. Needless to say my newest car I have ever owned was payed for with cash for a total of 8k. This following year I'm going to sale it an use my car fund of 6k to buy a 14k car. Get away from the red face child thing of wanting it now, now, now and save! Credit is than irrelevant if you use cash.

Re: Is all debt bad?

Polno — Mon, 05 Aug 2019 03:43:19 GMT

In general debt used in any form is bad. Buying a house, a car, credit cards, opening a business. It just never adds up. Do the math. A mortgage is going to cost way more than the house is worth. A car will depriciate. A credit card.... go ask a few millionaires if the have any. And then ask them how they became millionaires. I know you think you need that 7 dollar coffee in the morning but you don't. I know you think you need to buy new clothes for your kids for school but there are consingment sales with ralph Lauren stuff. I outfit my child whos 3 for 40 bucks a year. I set money into my 401k faithfully. I have saved an emergency fund for when things happen.im working on saving for a house in full. Averege income in America per person is 31000. Setting 10% aside for 401k leaves 27000. Minus bills and such( car payment is not a bill , you dont make one) you set up a budget and stick to it. You will save money. You just have to figure out whats an actually necessity and whats not. And yes i allow myself fun money. No debt is good. Im not by anymeans a bible thumper but one passage sticks out. THE BORROWER IS SLAVE TO THE LENDER.

Re: Is all debt bad?

Unorunner9 — Mon, 19 Aug 2019 01:08:30 GMT

If you ever plan to use credit you need to have credit available . 35% of tour credit score is driven by Payment History, so in order to further enhance your credit profile and increase your credit score you need to have a credit product (loan, personal loan, line of credit, mortgage, auto loan, credit card. Etc that generates a statement with a balance monthly that would require you to submit some payment . What is required in each individual part is to use credit responsibly so as to have it reported favorably on your behalf.

Re: Is all debt bad?

Unorunner9 — Mon, 19 Aug 2019 01:11:02 GMT

35% of your credit score is driven by Payment History. So you need to have a payment reported to the credit bureaus on a monthly basis to show that you are capable of being on time with your payments . Getting a credit card is the easiest way to get and enhance your credit profile

Re: Is all debt bad?

Dark_Recruiter — Sat, 31 Aug 2019 01:16:14 GMT

Debt is only bad if you cannot manage it. I have two credit cards and two bank loans under my belt and them alone put me at 710 credit. You just have to be smart as well as not put too much financial burden on yourself

Re: Is all debt bad?

Gu 1 — Fri, 31 Jan 2020 01:51:39 GMT

No if you don’t have at least 2 credit cards you don’t exist and your FICO score will be under the minimum low so won’t get any loan,mortgage or any type of credit,unless you have cash to buy everything you need

Re: Is all debt bad?

Polno — Fri, 31 Jan 2020 10:22:51 GMT

You do not need credit score to get a home loan. Find a lender who does manual underwriting and put 20% down. Remember credit scores didnt exist until 1950 when the diners card came out. Its just one big scam to make someone else wealthy. I ask all of you who manage your credit so well "how much do you have in your bank account for emergencies?" Im guessing not much. If we all had atleast 5k for emergencies then stupid companies like earn in wouldn't exist. Break the cycle people.

Re: Is all debt bad?

ari3sdog — Thu, 06 Feb 2020 12:16:40 GMT

Yes. Nuff Said.

Re: Is all debt bad?

kdbyse00 — Wed, 13 May 2020 14:39:35 GMT

Think about it like this.

You take out a loan, now you owe someone X amount of dollars and you have a limited amount of time to pay it back. They officially have power over you (financial). Now say you gotta pay $250/month for a loan. Think about where else that $250 could go if you were not in debt. Also, you have to pay interest. I don't know about you, but I don't like paying more money than what I'm supposed to at all. Quick example, if you took out a $5000 loan, would you rather pay back $5000 or say... $6213 (random number but hopefully you get the concept)? Banks are a business at the end of the day, and if you miss a payment, then you're going to be in some serious trouble. They'll take away whatever you got the loan for, you're credit score is going down the drain, and in some cases, it could lead to a lawsuit (like when people buy cars that have been repo'd). I say the best thing for all of us to do is to stay out of debt. I think about how much money I could have had if I never would have gotten into debt, and now I'm changing that for my life and will use that to build myself up in life, especially now that I'm in college. So to answer your question, yes all debt is bad. The only person that really even half-way benefit from debt is the lender, and I say half-way because they loaned their money and we do have some people out there who try to be low-down. So try to avoid debt at all cost.

Re: Is all debt bad?

DaveT315 — Wed, 13 May 2020 21:44:31 GMT

I agree up to a point. Debt used to acquire income producing assets is good debt. If what you are buying on credit does not produce income, that is bad debt if you carry a balance. Financing the purchase of a rental property is good debt if the rental income is paying off the loan. Using a credit card to buy groceries, a vacation, a restaurant meal, etc. is bad debt but only if you don't pay off the credit card statement balance in full each month.

Most would consider the mortgage on a primary residence a liability (because the asset does not generate income), but necessary debt to provide a roof over your head.

There is no magic number of loans or credit cards for a good credit score. What matters is your payment history and the length of your credit history and your % credit utilization. I see a lot of posts in this thread that claim there is a limit on the number of loans and credit cards you can have for a high credit score. I have 9 mortgages, and seven credit cards and two HELOCs that are treated as revolving credit lines. My credit score last month was 843 with a credit history of on-time payments for the past 30 years. My credit card utilization rate is under 10% right now only because I have some credit card balances at 0% APR. These balances will all be paid in full by the time the 0% promotional rate period expires.

A couple of years ago, one bank I use offered a 0% interest, $0 cash advance fee for a 13-month cash advance. I used the cash advance to borrow $25000, then used the money to buy a few CDs at my credit union. The credit union paid me 2% interest ($500) over the following 12 months. I made minimum payments ($250) to the credit card balance then paid the balance in full when the CDs matured. I just viewed that experience as receiving a $500 cash gift from my bank for being a good customer.

The point I am trying to make is credit can be your friend if used responsibily.