Accumulating debt is only ever a good practice if you are in control and that you know what you are doing. Don't let any well meaning friend or relative tell you it is okay and that being in debt to a credit card company is an accepted part of every day life. Credit is bad, it has always been and always will be. It will keep you poor.
Borrowing money to buy something that depreciates in value like a car or expensive music system is double trouble. Not only do you have to pay interest to the credit company or bank but the item you bought goes down in value as the months or years go by as well. By far the best way to purchase is with cash.
As is often the case, people with a bad credit history are constantly hunted down by credit card companies and the likes such as loan companies. They are only interested in maintaining someone in debt for as long as possible and the longer the better as far as they are concerned.
The best idea regarding the use of a credit card is to make sure you pay the balance at the end of the month. Many families pay for groceries and other weekly living expenses by credit card knowing that the balance will be paid at the end of the month, avoiding credit card interest charges and earning interest while that money is sitting in the bank until used to pay the end of month balance.
Another problem with uncontrolled debt is that many of the big companies that we all rely on week to week such as gas and electricity supply companies and even potential employers look down on people with bad credit scores. This is a big reason why you should take care of your credit score and manage it to a reasonably low and controlled level.
If you ever want to buy real estate, such as a home, high credit card debt and a high limit will make a bank or other lending institution think twice at offering you a mortgage. Borrowing money to buy real estate is usually a good move as it rises in value over time and once the mortgage is paid in full the home owner lives relatively cheaply.
Understandably though, sometimes having a small amount of debt is unavoidable. An urgent medical expense or loss of employment can lead to borrowing money to live on. Borrowing money while not receiving a wage is a big no no. A much better idea would be to live with family or close friends until employment is gained.
An even better idea is to always have an emergency fund to fall back on. This is an absolute must. Placing ten percent of your weekly or monthly income into an emergency fund is an easy way to achieve this. Generally, an amount which would let you live for 6 months is ideal.
Having multiple credit cards and using one or more to pay debt on another card is just plain economical suicide. This type of debt juggling is crazy and more often than not leads to big problems, a bad credit rating and having to pay huge amounts of interest. Concentrate on paying down the biggest debt, cut up the card and move to the next card and repeat the process until you are down to a single card.
All the interest that you were paying could probably be spent, leaving you without the need for a credit card. Learning to budget and control your spending habits will make life a lot simpler and even leave you with more money to live with. Budgeting can be learned. If you need advice and tuition your local government, high school or technical institute should be able to help you.
