Debt is commonly perceived as a negative side effect of borrowing money. However, there are actually several benefits to having debt. To determine your financial health, it’s important to understand which type of debt you have: good debt or bad debt.

Examples of Good Debt

Good debt is when money is borrowed to purchase something with a value that will increase over time. 

· Minimal credit card debt – If payments towards the principal balance are made on time, credit card debt can help build a credit score which will allow you to purchase a car or a home.

· Student loans – Having a college degree increases your value to employers and your likelihood of earning a higher salary over the course of your career. 

· Home mortgages and car loans – Homes not only give you a place to live, but they also grow in value over the years. The same can be said for automobiles, as long as they’re well-maintained.

Examples of Bad Debt 

Bad debt is debt that yields no return to the borrower.

· Credit card interest and penalty debt – If the balance is not paid down each month, borrowers will lose money over time due to high interest rates as well as late payment, overdraft, and annual fees. 

· Payday loans – Cash advances on paychecks are quite possibly the worst type of debt. The high interest rates of payday loans are designed to snowball costs.

 Eliminating bad debt is the first step in obtaining good financial health. If you’re struggling with payday loans or other bad debt, Progressive Debt Relief can help. Our debt assistance and credit counseling program can provide the tools you need to get back on a stable financial path. We are determined to ensure that you avoid future financial distress and strive to help you establish a debt-free life.

Contact us today 877.590.1847 to find out more about our services or to schedule a complimentary consultation.