The verdict as to whether credit card debt is good or bad is a shady line. Some financial experts agree that the only good debt is no debt at all. However, others believe that a wisely managed credit card is best. Managing your debt wisely means not to overextend your balances so that you can't afford to pay the minimums, or accruing so much interest that your debt never gets paid off. The bottom line is that credit card debt can be a great tool in establishing (or re-establishing) a positive credit score. Here are some useful tips to managing your debt wisely:
1) Always make your payments on time. This may seem obvious, however missing a payment by even one day can send your APR skyrocketing, and you'll often get hit with exorbitant late charges.
2) Pay more than the minimum amount, especially if your balance is high. Paying only the minimum every month greatly extends the amount of time to pay off the balance and means that you will pay back nearly three times the amount back in interest.
3) Before applying, read the card offers very carefully. Avoid cards with annual fees, high APRS, and secured cards.
4) Check your credit report at least a few times per year. Make sure the credit card company is accurately reporting your payments if they are on time. If you find inaccurate information, challenge it immediately.
5) Call your card company and ask them for a lower APR or a higher credit limit. Often times, if you are making your payments on time the company will raise your maximum limit automatically.
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