Examples Of Bad Debt

Credit Card Debt

• Accumulating credit card debt by purchasing non-essential items or living beyond your means is considered bad debt.
• Some credit card companies charge as high as 40% p.a.

Luxury Car Loans

• Taking out a loan for an expensive luxury vehicle can be classified as bad debt. Cars typically depreciate in value over time, meaning you may owe more than the car is worth.
• A new car can depreciated by 8% to 10% as soon as bought.

Payday Loans

• These short-term loans often target individuals in need of quick cash. They come with exorbitant interest rates and fees and may exceed 400% APR.