Dangers of Credit Card Debt

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Avoiding credit card debt is important for keeping your credit rating as high as possible in order to get approved for home and car loans. Pay off credit cards fully, and make sure interest rates are low with advice from a registered financial consultant in this free video on credit debt.

Part of the Video Series: Investing & Money Management
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Video Transcript

This is financial adviser, Patrick Munro, talking about the dangers of credit card debt. Credit cards are a privilege, not a right. And as a responsible creditor, you should deal with credit cards in a tactful way. Credit cards are used as a bridge to retain cash. Try not to use them in a frivolous way going forward, because it can really affect you a lot. You need to work with credit cards to make sure that you pay off the balances, if at all possible. And if you cannot pay off the balance, make sure that your credit card enjoys the very much lowest rate of interest possible, because then you are paying a rate that is good for your budget going forward, as well. Make sure you don't carry too many credit cards. That's a negative on your credit file. Too many open accounts, of course, will trigger a lowering of your credit score. Credit cards, of course, come in a wide variety of terms. Make sure that if you are a good credit risk and you need more availability of credit, you can call a credit card company and negotiate with them for a better situation on your credit cards. This is Patrick Munro, financial adviser, discussing credit cards.

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