What is Debt?

Debt is an amount of money you owe to a person, bank, or business. You must pay back the debt you owe. You might have to give back what you bought with credit if you do not pay your debt.

Blackboard with chalk writing on it that says student loan debt. There are books and a diploma stacked in front of it to the left side of the picture.

Types of Debt

Some debt you choose. You can choose to take out a student loan or a car loan. You can choose to buy things with a credit card.

Some debt is unexpected. This can be hard to plan ahead for. Unexpected debt could be needing a loan or using a credit card to pay for a home repair. Unexpected debt could be from getting sick and being in the hospital.