Good credit card debt?

In my workshops I talk about "good debt" vs "bad debt". Robert Kiyosaki, author of the Rich Dad Poor Dad series of books defines "good debt" as debt that someone else is paying for.

The simple example there being multi-family real estate. Your tenants are paying the mortgage.

Someone asked me recently if there was any "good" credit card debt. My knee jerk response was no but then I thought about it and now my answer is "maybe".

If used properly it can work in your favor.

My friend who owns the tuxedo shop charges tens of thousands of dollars a year on her credit cards to pay for the tuxedos. Of course she pays the bill off when it arrives BUT she benefits from all those rewards.

I don't think she's actually paid for a Christmas gift in years! 🙂

Credit card debt could save you money. An example might be let's say you have a 0% interest card and you have a large expense coming up...maybe a new car or remodeling the kitchen?

If you'll have access to the needed money in the near future but not at the current moment, you could use your credit card as a "bridge loan" till the cash is available. This only works if your interest rate is 0% or at least lower than what you'd pay if you got a conventional loan.

Don't try this unless the future money is guaranteed....or you already have it set aside.

In this case you'd save money and get some nice reward points.

So, yes SOME credit card debt can be good if used CAREFULLY!