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Summary

Credit cards can offer convenience, buyer protections, and even a source of emergency cash. But credit card debt is almost always toxic and should be among the first debts you pay off.

Credit Limits

  • The best way to handle credit cards is to pay them off in full each month. If you can't swing that right now, at least pay significantly more than the minimum balance.

  • Using more than 30% of the available limit on any card can hurt your credit score. “Maxing out” your cards can lead to higher interest rates and penalties.

  • Credit card issuers have invented a number of ways to “ding” their customers even if they don't carry a balance. Read the disclosures your issuer sends you and consider some kind of automatic payment system so you're never late.


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