How Much Debt Should You Have On Your Credit Card?

By Author: Jennifer Baxt
Total Articles: 200
Comment this article

Understanding everything that makes up your credit score can be a lot to take in. You have to figure out a variety of items, including how many bills you have been late on, how often you have tried to get credit, how many credit cards you have, how much you owe compared with how much you make and more. One thing that you can work on that will help your credit score is paying down your credit cards.

Most people think that you have to completely pay off your credit card, but the truth is that you only need to pay it down a little bit. So, how much should you pay down your credit card? Should you pay 90 percent off? Maybe 20 percent? What is the best amount?

Your credit cards have a lot to do with your credit score. If you fall behind on payments for your credit cards, then you will find your credit score drops, as well as your interest rate increases. If you owe too much on your credit card, your credit score will drop. If you have too many credit cards, or too few, your credit score will drop. They are great things to have when you have to purchase items, but they can be a pain too when they get out of hand.

So, ...
... to go back to the previous question of how much you should have on your credit card, generally if you can keep it to 30 percent and under, you will be in good shape. For example, if you find that your credit card has an credit limit of $1,000 and you owe $800 on it, then you have used 80 percent of your credit limit. That hurts your credit. However, if you have only spent $250 on it, then you have only used 25 percent of your credit limit.

To lower how much you owe on your credit card, there are two methods by which you can go by. The first is to actually start paying your credit card off. By saving money and cutting costs, as well as limiting how much you use your credit card, you can lower how much is on your credit report.
However, there is a second way that you can lower the percentage you owe on your credit card without paying anything off. All you have to do, and make sure you have a good credit score, is to increase your credit limit. For example, if you owe $800 on a $1,000 credit limit card, you owe 80 percent. However, if you raise your credit limit to $10,000, then you will only have eight percent owing on your credit card.

Paying off your credit card is very important. All you have to do is to make sure that you do not owe too much on your credit card. Owing too much can hurt your credit score, and that can cause you to have higher interest rates. So try and increase your credit limit, pay off your credit card and limit how much you use your credit card.

If you or anyone that you know would care for more information regarding this post, feel free to visit http://www.creditrepairbydrjen.com