What Not to Do When in Debt
There are lots of books telling you how to get out of debt, countless seminars and words of wisdom. They are useful, don’t get me wrong, but the most important secret fits in a single sentence:
Don’t Use Credit Cards More Than Absolutely Necessary
The dirty little secret about credit card companies is that they want you in debt. The more money you owe them, the more money they make. This means that one of the best things you can do for your credit is to pay down your credit cards. Just paying the minimum balance doesn’t help because <link to credit score>the two biggest factors in your credit score</link> are how promptly you pay your debt and how much debt you have relative to your credit limit.
The absolute worst thing you can do is put one credit card’s bills on another credit card, and juggle the balance back and forth month after month. It seems like a good idea, but really it’s nowhere near as efficient debt consolidation because the interest rates are too high.