With the pressure of repayment timelines looming over you, owing money can feel overwhelmingly negative. But, if you understand the difference between good and bad debt, you might be able to re-frame this feeling.

In August 2024, Equifax Canada’s Market Pulse Consumer Credit Trends and Insights Report found that consumer debt levels rose to $2.5 trillion in the second quarter of 2024; this is a 4.2 per cent increase since the second quarter of 2023. Card holders carry over $4,300 in credit card balance on average, which is the highest level since 2007.

Unfortunately, consumer debt tends to lean toward the “bad” end of the debt spectrum depending on the purchase.

On the other hand, borrowing money to purchase an investment property that will generate income over time leans toward “good” and Canadians are doing this too. A 2023 report by Royal Lepage found that one in four Canadians— current investors or not — planned to buy an investment property before 2028.