Question

1.You want a pony. You have always wanted a pony. You can buy a pony for $1000. You don’t have $1000 right now, but you can get a credit card to buy the pony with. Is this good debt, bad debt, or ugly debt? Why?

2.Ok, you want a pony, and it will cost you $1000. You don’t have $1000 right now, but you do have a business plan to giving pony rides to the kids in the neighbourhood, and your bank might lend you $1000 to start a business if you have a good plan. Is this a good debt, bad debt or ugly debt? Why?

Answer 1

This is considered "good debt", technically, because you are making an investment that will reap a reward later to give you not only the money to pay the debt off but to create wealth. Like student loans, investing in a service that will create wealth. I think all debt is bad in my humble opinion as a default.

Step-by-step explanation: