It's that time of year again, and our credit cards are bulging! Do we have a plan to pay these off before next season?
Here is some interesting information found at the Motley Fool's Credit Center
-Total consumer credit: $1.7 trillion.
-Credit card debt carried by the average American: $8,562.
-Total finance charges Americans paid in 2001: $50 billion.
-Percent of U.S. households deemed credit worthy by the lending industry: 78%.
-Number of credit card holders who declared bankruptcy last year: 1.3 million.
According to another article, paying off your credit card could actually cost you more!!
From a credit score perspective, having a low (or no) balance on a credit card will lift your credit score. As a matter of fact, 30% of your credit score is based on the balances that you owe.
Having credit accounts and owing money on
them does not necessarily mean you are a highrisk
borrower with a low FICO® score. However,
when a high percentage of a person’s available
credit has already been used, this can indicate
that a person is overextended, and is more likely
to make some payments late or not at all.
Keeping a balance isn't always a bad thing. For example, I have a credit card that is charging 1.9%. My savings account is paying 4 something. By not paying the account in full, I still get to earn a couple of points on my money. If you DO keep a balance, don't keep the card maxed out. This will kill your credit score.
Like anything else, credit cards are a good thing if used in moderation!