Easy access to credit cards is a large reason for such a large increase for personal debt in the United States. Card issuers relish the chance to reel in those who'll continuously charge beyond their means at eighteen or twenty percent, and steer clear of people who they know will be able to pay their balance on time. Debt is a growing issue, and a complex one at that. Not all of debt is bad, however. When used intelligently, debt can be of tremendous assistance in building wealth.

One of the secrets, therefore, to being smart with your money is to differentiate between good debt and bad debt. While the differences often seem logical, it is a logic that apparently is missed by many Americans. "When you buy something that goes down in value immediately, that's bad debt," says David Bach, CEO of Finish Rich Inc. "If it has no potential to increase in value, that's bad debt."

Good debt is investment debt that creates value. Such investment debts can be found in student loans, real estate loans, home mortgages and business loans. Taking on debts that are tax-deductible and debts that produce more wealth in the long run are also valuable debts to consider.

Bad debt comes into play with the purchase of disposable items or durable goods when using high-interest credit cards and not paying the balance in full. Most people do not pay off the balance in whole before the due date, and this is where they find themselves in trouble. You are charged interest every month that you make a partial payment on your credit account. The disposable or durable item, purchased with credit cards, store credit cards, or through loans such as auto loans, continues to lose value, and the amount you paid for it continues to increase.