Debt is often discussed in negative terms, but debt isn’t just good or bad. It falls on a spectrum, and how you manage it plays a big role in how it impacts your finances.

Bad debt is usually high-interest credit cards that quickly accrue interest if you only make minimum payments. Good debt, such as a mortgage or student loan, can help you build long-term value and typically comes with much lower interest rates. Once you’ve paid off good debt, you often have an appreciating asset — your house or your college degree, for example.

What is debt?

Debt is money that is borrowed from an organization like a bank, credit union or online lender. Most debt is paid back with interest, which can be either fixed or variable. With either option, it is calculated based on the principal and is calcula

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