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The 1 Thing Every Credit Card Holder Should Do Now

Credit cards can be incredibly useful tools for managing your money. But used incorrectly, they can also devastate you with debt that's hard to overcome. What's the best way to handle your credit?

In the following video, Dan Caplinger, The Motley Fool's director of investment planning, looks at the one thing every credit card holder should do right now: commit to paying off outstanding balances. Dan notes that cards can be very useful when you don't carry a balance, but that when you open yourself up to the high interest rates that card companies charge, you pay more than you should while benefiting JPMorgan Chase (NYSE: JPM  ) , Citigroup (NYSE: C  ) , and a host of other card-issuing banks. By contrast, Dan suggests plenty of other lower-interest debt that's arguably smarter to have, such as the home loans that Fannie Mae (NASDAQOTCBB: FNMA  ) , Freddie Mac (NASDAQOTCBB: FMCC  ) , and other agencies help to keep rates low. With the Fed only likely to push rates higher in the near future, committing to getting rid of credit card debt is a smart move at any time.

A card-issuing bank worth investing in
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Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On January 14, 2014, at 8:32 AM, rickray777 wrote:

    Yes, I remember getting into credit card debt for over four grand only a few years ago. It was only during this past year that I was able to have the cycle broken for me! Well, it wasn't fun; but I finally did pay it off, and I have a new Cash-Rewards credit card from the same bank. I have now learned (the hard way!) to make it a point to pay off any balance in full by the end of the month; thereby earning cash back on any purchases. It actually feels pretty good to be debt-free; and also to grow and change, as time goes on. It's almost Zen-like.

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Dan Caplinger
TMFGalagan

Dan Caplinger has been a contract writer for the Motley Fool since 2006. As the Fool's Director of Investment Planning, Dan oversees much of the personal-finance and investment-planning content published daily on Fool.com. With a background as an estate-planning attorney and independent financial consultant, Dan's articles are based on more than 20 years of experience from all angles of the financial world.

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10/21/2014 4:00 PM
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