JUN 29, 2011
During the past few years of recession, you’ve probably heard and read a lot about how unsecured debt (specifically credit card debt) contributed to the country’s economic problems.
The numbers can be downright scary: An Experian poll earlier this year showed that the average consumer owed more than $4,200 in credit card debt by the end of 2010. And a study by Sallie Mae found that college seniors graduate with an average of more than $4,100 in credit card debt.
It could lead you to question why anyone would ever need a credit card in their name, but it’s important to realize that credit cards are not the enemy – credit card debt is, and it’s best to think twice before avoiding credit cards.
In fact, wise use of a credit card can help you improve your credit score. Reliable payment history on a credit card will show up on your credit report – and count in your favor with potential creditors. Plus, there are several ways you can take advantage of credit cards; the trick is just not to let them take advantage of you. Fortunately, having a card and having debt on it do not have to go hand in hand.
The principles of how to avoid credit card debt are actually very simple to understand – but sometimes not so easy to live by:
The only way to build good credit is to make good use of credit. Smart credit card use is an easy way to improve your credit score.