It would be easier to designate a PERSON as either good or bad at utilizing debt. Then our actions, or lack thereof in some cases, determine whether debt is good or bad.

Your choices determine how you use or misuse debt.

Also, if you have $10,000 in cash, you can shop around and get a very good deal. You can buy a nice used car privately even. If you’re “trapped” into needing financing to buy a car, dealers can sell you on a more expensive car. They can pile on various fees and you won’t feel it as much because you’re focused on the monthly payment.

There is a reason car financing companies (GMAC, Toyota Finance, etc.) are the most profitable arms of car companies. Notice that GM went bankrupt. GMAC did not.

Using credit cards for points is another trap. It’s like the mouse who says a mousetrap is a good source of cheese. Yes, you can try to get something for nothing. You can sometimes snatch the cheese from the trap and not get caught. You can go a few months and “win” at this game of getting points and not paying any interest or fees.

But once every few months something will be tripped up. You’ll not receive the bill in the mail and not pay on time. The payment doesn’t get applied in a timely fashion. You run into a cash flow problem and, no surprise, you decide to only pay the minimum payment this time. You lose your job. An unexpected expense means you can’t pay the full amount as you intended. Any number of things can happen. It’s a trap, waiting to spring.

There’s no such thing as a free lunch. Most people end up paying some fees and interest even if they don’t intend to.

A house and an education I can agree with going into a small amount of debt for. There’s no point borrowing for a history degree or something that doesn’t lead directly to a job however.