{"id":4499,"date":"2024-02-26T19:57:39","date_gmt":"2024-02-26T19:57:39","guid":{"rendered":"https:\/\/www.beyondfinance.com\/blog\/?p=4499"},"modified":"2024-02-26T19:57:40","modified_gmt":"2024-02-26T19:57:40","slug":"beyond-question-isnt-all-personal-debt-bad","status":"publish","type":"post","link":"https:\/\/www.beyondfinance.com\/blog\/beyond-question-isnt-all-personal-debt-bad\/","title":{"rendered":"Beyond Question: Isn\u2019t All Personal Debt Bad?"},"content":{"rendered":"\n

From time to time, the hard-working people who enter the Beyond Finance personal debt consolidation program<\/a> to reduce their monthly payments have questions along the way. Learning something in our free financial therapy classes<\/a> may not spark these financial questions. <\/p>\n\n\n\n

Sometimes, a credit card commercial has a talking point that creates blank thought bubbles and confused faces. One we hear more than most is, \u201cIsn\u2019t all personal debt bad?\u201d <\/strong><\/p>\n\n\n\n

It was personal debt that brought them to us seeking help. The collection calls during dinner. Those white bills are turning pink in the mailbox. And what about the insurmountable mental health issues that Acute Financial Stress<\/a> causes? None of that is a picnic. <\/p>\n\n\n\n

So, when a commercial or paid spokesperson says online or on TV that \u201cyou need a positive debt record\u201d to purchase this house, it\u2019s easy to understand why that makes no sense. The misunderstanding is that the perception of debt is confusing, not that statement. <\/p>\n\n\n\n

This month\u2019s \u201cBeyond Question\u201d discusses the differences between bad and good personal debt.\u00a0<\/strong><\/h4>\n\n\n\n
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A Look at \u201cBad\u201d Personal Debt\u00a0<\/strong><\/h2>\n\n\n\n
\"What<\/figure>\n\n\n\n

The type of personal debt that brings people to seek help with their economic struggles conjures only negative feelings and awful memories. There you are, things are going well as you drive to the grocery store, when\u2026BAM! <\/strong><\/p>\n\n\n\n

Someone ran the red light and smacked directly into the passenger side of your SUV. Fortunately, no one was hurt, but that damage costs time, stress, and money. Even with insurance, you may have to get a rental, rideshare, or bus pass. And what if the insurance fights you? That wreck is a more significant problem; you didn\u2019t schedule it, so you must consider credit cards.\u00a0<\/p>\n\n\n\n

Sound familiar? <\/p>\n\n\n\n

It could happen to anyone. You pay your bills, but it doesn\u2019t take long for debt to spiral out of control when that unexpected emergency occurs. The only \u201cbenefit\u201d to that debt is getting your car back. Now, you must pay it back, usually through credit cards. That kind of personal debt hurts and may cause more harm than good. <\/p>\n\n\n\n

\u201cBad debt\u201d is borrowing money from a bank or credit card company not designed for long-term benefits. <\/strong><\/p>\n\n\n\n

It allows you to make a transaction for the short term, leaving you with a burden of debt that may exceed your budget. This creates that budget gap, forcing you to make minimum monthly payments for an undetermined time. There is no investment in your life, and few \u201cbad debt\u201d expenses are secured or backed by collateral. <\/p>\n\n\n\n

These aren\u2019t tax deductions, usually have an interest rate above 6%, and lose value within weeks. Although some \u201cbad debt\u201d purchases are necessities for a maturing individual or a growing family, they can still create mental health and financial wellness issues if they are not managed effectively. <\/p>\n\n\n\n

Examples of bad debt include: <\/strong><\/p>\n\n\n\n