Not all debt is the same. Good debt funds things that grow in value or income (education, a sensible home loan). Bad debt funds depreciating stuff at high interest (credit-card balances, BNPL on lifestyle goods).
Good debt can speed up wealth-building if used carefully. Bad debt quietly destroys it — credit-card interest of 30–40% eats faster than almost any investment can grow.
- 01
Before borrowing, ask: will this still have value in 5 years?
- 02
List all your debts. Sort by interest rate, highest first.
- 03
Attack the high-interest ones aggressively — they're emergencies.
- 04
Never carry a credit-card balance month to month if you can help it.
A ₹50,000 phone on a 24-month EMI at 18% costs you thousands extra and is worth a quarter of that in two years. A skill course at the same price could double your income.