Credit card debt is not always bad. It usually is, but it is wrong to assume that it is all bad. In fact, a person with no credit card debt in their history will usually have a low credit score. It could probably be as low as a delinquent payer.
Some financial experts will probably disagree because they consider debts with low interest rates as the only good debt. Credit cards have high interest rates and it is such a huge temptation to deal with. However, despite the fact that only a handful of people can manage their credit card debt does not mean it is all bad.
In fact, an article published by USA Today in 2011 stated that credit card debt may be good for the economy. It promotes consumer spending. While it can be difficult to curb the spending, it keeps the economy ball rolling. When consumers are able to spend, businesses thrive and employees are given stable jobs. At least, until the debts get too high to pay off.
While we do not dispute the negative effects of credit cards in our overall financial standing, bad credit card debt only happens when you do not know how to manage it. You may have more than 5 credit card debts but still be considered as having good credit card debt. But if you are unable to pay for your debts or can only pay for the minimum payment every time, you are on a spiral down to bad debt.
How to Make Bad Credit Card Debt Good
You can actually consider credit cards as the ultimate test to practicing wise financial management. The lure of easy spending and coping with the high interest rate is formidable and not easy to handle. Here are some tips to keeping good credit card debt.
Come up with a solid budget plan. It all begins with knowing how much you can actually afford. List your income and the various expenses that you have to pay for every month. The first step to achieving financial freedom is knowing your financial capabilities.
Stay within your spending limit. Creating a budget plan is not enough. You need to follow through and stick to it. To succeed involves discipline and determination to stick to your goals.
Create a payment calendar. A payment calendar is necessary for those who have multiple payment obligations. It will help you keep track of the payments that you have to make and will keep you from missing due dates. If anything, that will save you on penalty and late payment charges.
Aim to pay more than the minimum payment. When you think about it, the minimum payment is only a small percentage of your total credit card debt. If you stick to this amount alone, it will take a lifetime to complete your credit card payments.
Paying off credit card debt is often likened to aiming for an ideal weight. Even when you have achieved a manageable debt, you need to keep working to keep it that way. One slip or major purchase that you cannot afford will hurt your financial standing once more and get you back where you started.
If you wish to talk to a debt relief financial expert to help you get started, give us a call. NationalDebtRelief.com is here to help people struggling with their credit card debts. You can fill out the form on the right side of this page and we will gladly get in touch with you to discuss your financial troubles.