What's the difference between good debt and bad debt?

Good debt finances something that builds wealth or income and carries a reasonable rate — a mortgage on a home, federal student loans for a degree that raises your earnings, or a loan for a business asset. Bad debt funds things that lose value or get consumed, often at high interest — credit-card balances, payday loans, or financing a depreciating car you can't afford. The cleanest test: does the debt help your net worth grow over time, and is the interest rate low enough to justify it? Even 'good' debt becomes bad if you over-borrow. The priority order for most people is to kill high-interest bad debt first (especially anything above roughly 8–10%), keep moderate good debt, and invest the rest. Watch the rate and the purpose, not just the label. To map your payoff plan, try wealthserene.com/tools/debt-payoff.