|
Why a little debt can be a good thing
Whether you just got your first credit card or you have a wallet full of them, chances are you’ve heard someone in your life tell you that paying off your credit card every month isn’t necessary. “You’re just giving away your money,” they’ll say. “Plus, it’s better to keep a balance, because it will help improve your credit score.” Well, both of these statements are at least partially true. At the end of the day, if you’re suffering in your day-to-day life, struggling to meet any of your basic needs and trying to pay off more than the minimum required payment on your credit card, you’re doing something wrong. The point of carrying a line of credit is to make your life more manageable, not to make it more difficult. Of course, you should always work to decrease the level of debt you carry, but not at the expense of your well-being. Speaking to the second point, making routine payments on a credit card can help increase your credit score or, at the very least, keep it from slumping. But a balance of zero will do you no good in proving to creditors that you’re able to pay off your debt. It simply shows that you can avoid using credit, which will not do much for improving your credit score.
Establishing the right budget with your credit
At the end of the day, you need to be able to provide for yourself and for your family before you deal with credit card debt. You shouldn’t be worried about paying off your credit card before you meet the basic needs of you and yours. This will require you to make up a budget. How much do you make every month? How much do you need to live? How much can you safely afford to put towards paying down your credit card? You should be asking those questions (in that order!) when you are creating your budget. The last thing you want to do is pay off your credit card first and then find yourself struggling to buy groceries next week. Prioritize your money and figure out what needs to be purchased every month and then worry about your credit card bills. Of course, don’t put, say, shopping for a new TV or motorcycle over the credit card, but know how much you can handle to pay off and go for it!
Getting control of your financial freedom today!
Everyone wants to be debt-free. But part of owning a credit card is knowing your limits and understanding how much you can afford to safely put on it every month and how much you can pay off every month. Knowing your boundaries and establishing a routine is the most important thing about using a credit card. By paying off your minimum every month, you will be helping to improve your credit score or, at the very least, keep it status quo. You’ll be glad you did when you’re living with everything you need plus paying off your bills in a timely fashion every month.
|
|
|
|
|
