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CREDIT 101 Top Ten Tings to Know! Drowning in Credit Card Debt Americans are loaded with credit card debt. The average American household with at least one credit card has nearly $9,200 in credit card debt. The average interest rate runs in the mid-to high teens at any given time. Some debt is good! Borrowing for home or for college usually makes good sense. Just make sure you don’t borrow more than you can afford to pay back and shop for good rates! SOME DEBT IS BAD! Dont use a credit card to pay for things you consume quickly, such as meals and vacations, if you cant afford to pay off your monthly bill in full in a month or two. Theres no faster way to fall into debt. Instead, put aside some cash each month for these items so you can pay the bill in full. If theres something you really want, but its expensive, save for it over a period of weeks or months before charging it so that you can pay the balance when its due and avoid interest charges. Check out this link: /tools/debtplanner/debtplanner.jsp Control Spending Most people spend thousands of dollars without much thought to what they’re buying. Writing down everything you spend for a month is a great way to see what your spending habits are! You can then identify problem areas and cut back on things you don’t really need. Pay off high-rate debts first! The key to getting out of debt efficiently is to first pay down the balances of loans or credit cards that charge the most interest, while paying minimum payments on the other debt. Once the high-interest debt is gone, tackle the next highest, and so on. Don’t fall into the minimum trap! If you just pay the minimum due on credit card bills, you’ll barely cover the interest. It will take you years to pay off your balance, and potentially you’ll end up spending thousands of dollars more than the original amount you charged. Watch where you borrow! It may be convenient to borrow against your home or your 401(k) to pay off your debt, but it can be dangerous! You