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I come not to bury debt, but to praise it. Here’s how good debt can improve your life and put a smile on your face.

3 minute read


My brother-in-law has declared bankruptcy twice because he can’t control his credit card spending. My sister-in-law refuses to own a credit card and has no debt except a 15-year mortgage that’s damn near paid off.

I think they’re both crazy.

Obviously, bankruptcy is a nuclear option that leaves you radioactive to lenders for a decade. But not owning a credit card can also cost you.

My sister-in-law buys everything with cash, and she’s a super-thrifty shopper. Example: In her garage are shelves full of paper towels, because she found a bargain and bought them in Army-like bulk. She spends hours scouring local discount stores for such mega-deals. But if she had made those purchases with a rewards credit card – like the excellent ones we’ll tell you about on Wednesday — she would’ve saved a hell of a lot more.

Alas, I can’t convince her. She’s so brainwashed into believing all debt is evil, she refuses to believe debt has an angelic side.

How to profit from debt

In fact, my sister-in-law won’t be happy until she pays off the only debt she has — her 15-year mortgage. When I told her I adore my 30-year mortgage, she scowled at me like I was advocating puppy-drowning just for fun.

But because my interest rate is only 3.5 percent, and because I’m saving as much as I can for retirement at rates a little higher than that, it makes sense to keep this particular debt on my books. Besides, I get a tax break on my mortgage interest, and I get peace of mind knowing I have a year of emergency cash available should I get fired from (Hey, you never know.)

And heaven forbid CD rates should ever return to pre-recession levels. If a five-year CD returns almost 6 percent like it did in 2000, my mortgage is no longer a debt – it’s a money-maker.

Getting in and out of debt without a hitch

So that’s my weird way of welcoming you to the new and improved — which coincides with something called Financial Literacy Month.

The site’s organizers say, “Freedom from debt is an achievable goal for every family.” And yet here I am endorsing debt.

But part of literacy is being able to read between the lines. Debt is all about control, and a lot of people don’t have it. For the past seven years, an organization called America Saves has posed uncomfortable money questions to more than 1,000 adults. I say “uncomfortable” because in its 2013 Annual America Saves Survey, more than half of those adults admitted they haven’t saved nearly enough for retirement. Even worse, “only about half of Americans reported good savings habits.”

Other studies show the average American household owes $15,270 on their credit cards — for a total of $885 billion nationwide. Not that’s what I call some scary debt.

Debt dieting

The problem is, Americans deal with their debt like they deal with their weight: We binge when we should know better, then we crash-diet until we can’t take it anymore, and we repeat the process until we’re finally disgusted with the topic and ourselves.

From now until the next Financial Literacy Week and beyond, wants to teach you how to think about money like you should think about food — fun in the right portions. By this time next year, I hope both you and my in-laws will agree with me.

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About the Author

Michael Koretzky

Michael Koretzky

I’ve covered a Democratic and Republican national convention, a couple of Space Shuttle launches, and music festivals in Istanbul and the Cayman Islands. What did they have in common? At some level, they were all about money. Now I'm a PFE-certified debt management professional who’s cut out the middleman and writes about money for a living. Sometimes that means explaining the difference between DTI and DMP. Other times, it means writing about student loan memes.

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