Personal Finance

Is There Such A Thing As Bad Debt?

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By Steven Lee

The word ‘debt’ is enough to make some people quiver with fear, but is it really that bad? After all debt has been around for thousands of years because people have always wanted or needed things they cannot afford to pay for in full at the time. Even back in the days when people traded with livestock rather than money, a system of credit existed.

Many people consider all debt to be bad but fail to realise that even things such as gas and electricity is a form of credit. The question of whether debt is really a bad thing can be answered with one word – ‘affordability’.

Put simply, a debt is not necessarily a bad thing as long as it is easily manageable. Indeed, in circumstances the debt itself is not the issue, but rather the borrower’s own attitude to risk. We’ve seen people over the past decade running into catastrophic debt management issues and, while many have these have occurred through no fault of their own (such as when they’ve been made redundant), a good proportion of debt woes come because the borrower had a blas

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