Good Debt vs Bad Debt or Why You Need a RRSP LoanPosted: February 14, 2014
Bad debts are the loans at high rates (anything over 7%) and are usually easy to get and hard to pay off. Credit cards, overdraft accounts (not line of credit accounts which are different), store credit with no payments for a year, payroll loans, etc. Next time you see one of those payroll advance adds on TV, pause the screen when the fine print comes on and read it. To make it easy for you, a $20 fee for a $200 loan for one week works out to approximately 520% per year as an interest rate. Definitely very bad debt.
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