Good debt is often seen as an investment in your future. It is typically used to finance something that will increase in value or generate long-term income. Think of it as a tool that can help you achieve a bigger goal. Some examples include mortgages and student loans.  Bad debt on the other hand drains your resources and does not provide you with lasting value. Bad debt is often used to purchase things that quickly lose value and don't generate long-term income or growth. Some examples of bad debt include credit cards and payday loans.