If, like many people in Tennessee, you have a lot of debt and are feeling overwhelmed about being able to pay it all off, the concept of there being good debt probably does not make much sense. However, debt can certainly work for you when used in a responsible way.
According to NerdWallet, it may helpful to think of debt as a tool to help you get ahead and get the things that you want in life. For instance, hardly anyone has the cash on hand to be able to pay outright for things like a new car, a nice house or a college education. However, all of those things are still obtained by many people by incurring debt in order to afford them. As long as you do not take on more debt than you can afford and you make timely payments each month, your credit score should remain high and you will remain attractive to borrowers looking to extend people credit.
Then, there are also the kind of debts that are not necessarily good but are sometimes unavoidable. For instance, if your car breaks down and needs some major repairs, you may end up putting it on a credit card if you do not have the money to pay. Another example of this kind of debt is medical debt. Nobody expects to be sick or injured, but sometimes medical treatment is necessary. These debts are unfortunate, but can be manageable. Medical debts can often be negotiated and credit card companies may be willing to work with you to lower your interest rate.
On the flip side, certain types of high interest loans are outright damaging to your financial health. Payday loans often carry interest rates as high as 391 percent. Borrowing against your retirement fund is also a bad idea, as you may incur penalties. Avoiding harmful debt and using helpful debt to your advantage is not always easy, but it is possible with some determination and self-control.