← Back to Academy

Good Debt vs. Bad Debt: The Mortgage vs. the Credit Card

Money Basics • Beginner Investing • 6 min

Not all debt is created equal — the same word, "debt," describes both a 30-year mortgage at around 6–7% interest that helps you build equity in a home, and a credit card balance charging north of 20% interest on a purchase that's already been used up. The label "good debt" versus "bad debt" isn't about debt being inherently virtuous or evil — it's about what the borrowed money is used for and what it costs to borrow…

2 of 2 free lessons used

Create a free account to keep reading

You have read your 2 free lessons. Making an account is free and gives you 2 more straight away — plus your progress, streak and quiz scores saved as you go.

Learning through your school? Join your class — school students get everything, at no personal cost.