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 (OTC:FNMA), Freddie Mac (OTC: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.