It is bad to have debts.
Hank needs a car, has $10,000 of cash on hand, and is at a car lot deciding on what kind of car he should buy.
Hank wants to pick and buy a car.
Hank chooses a gently used car that costs less than $10,000 and pays cash for it.
Hank picks a new car, puts the $10,000 as a down payment, and takes a loan out for the rest.
Hank owns the car and doesn't pay interest on any loans for it.
The loan accrues interest, making Hank pay more for the car than it's actually worth.