Yes, there is such a thing as good debt. There are only a few types of debt that fall into this category, but it's important to make the distinction. Some examples of good debt are:

Obtaining a mortgage to purchase your home would be an instance where making a debt would be a good thing. Investing in a home is smart because your home will appreciate so even though you are taking on a debt you are in a position to earn money in the long run.

Borrowing money for college is also an investment ? in your education. By educating yourself you give yourself more earning power. This is an instance when taking on debt is a wise choice.

* Debt associated with starting a business - Starting your own business can be a risky proposition, but it's done with the intention of earning money. However, some of the assets you purchase will depreciate rather than appreciating. But for practical purposes, you can consider this a good debt.

There are lots of examples of bad debt. Here are a few:

Financing a car ? unlike a home your car depreciates rapidly. That means you are not investing your money with the potential for a greater return in the long run. The money you spend is gone.

Almost everyone has and uses credit cards and they are convenient. However credit card debt is considered bad debt. Typically the purchases made on a credit card are things that will not earn you money over time. Credit card purchases are rarely an investment.

* Most personal loans - Personal loans are often taken out to finance purchases of things such as appliances, furniture, and vacations. These are often things we need, and a vacation can even help us become more productive, allowing us to potentially earn more. But none of these things appreciate in value, so they are considered bad debt.

Good debt does not mean that it can not be harmful to us if we are not careful. Taking on good debt should be thought out carefully. The lender should not be the only one crunching the numbers to see if the debt is within our ability to pay. We have to take personal responsibility for counting the cost and being sure we will be able to make the monthly payments.

On the other side of the coin, bad debt is not necessarily taboo. There's no harm in taking on some bad debt to get the things we need and want. But the smart thing to do is keep it to a minimum, only using it for things we really need.