Now you've read about the difference between good debt and bad debt, and you've been warned about incurring further credit card debt. Hereafter, any time you are tempted to whip out a credit card to purchase something that will not increase in value, you can do yourself a big favor: Ask yourself if you could pay cash for it. If you cannot afford to pay for it in cash, then you're better off not buying it.

Ideally, it's best to truly use your credit cards sparingly — almost strictly as an emergency safety net. If you are using your credit cards and paying off the balances in full, then fine. But if you are racking up credit charges, maxing out your cards, and paying minimum balances, you are endangering your long-term stability and decreasing your ability to obtain low-interest loans. It's vitally important that you reduce any bad debt that is dragging you down. When things are back in line, keep in mind that good debt creates wealth while bad debt saps wealth.