Good, Bad And Neutral Debt

Not all debt is created equal. Some debt helps you build wealth. Other debt destroys lives.

Some debt is toxic. It ruins a person's financial position.

I should know. I have $30,000 in credit card debt.

This happened to me before. When I wrote my first book (finally published in 1999 but essentially written in 1996), I lived off my credit cards for about a year. I eventually ran up a $20,000 load that took me four years to pay off.

The Los Angeles Times says: Debt comes in three basic flavors: toxic, good and neutral. Toxic debt includes credit card debt, payday loans and other high- or variable-rate borrowing. Good debt includes borrowing that can help you build wealth, such as a moderate amount of mortgage or student loan debt. Neutral debt includes everything that's not actually toxic but that isn't helping you build wealth, such as fixed-rate car or personal loans.