Follow this #1 rule to avoid big credit card debt

Follow this #1 rule to avoid big credit card debt
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The word “debt” typically carries a negative connotation — which makes sense when you consider all the debt Americans owe these days.

To give you an idea, about 43 million Americans owe a combined $1.2 trillion in student loan debt, and the typical U.S. household now owes more than $16,000 in credit card debt. So it’s not surprising that you probably hear a lot of talk about how bad debt is and how it will ruin your life and so on.

But it’s actually not that simple.

Good debt vs. bad debt

Yes, certain types of debt can “ruin” your life when it causes you financial problems for a long time and prevents you from reaching any of your big goals. But here’s the key: that scenario is caused by certain types of debt and how you handle it.

It may sound crazy at first, but debt isn’t necessarily a bad thing — it’s how you use it that’s good or bad. And if you use it the right way, debt can have a lot of benefits.

It sounds complicated, but it doesn’t have to be — you just need to know a few things about how debt works and how to use it in your favor.

Here’s a breakdown of everything you need to know about good debt vs. bad debt, dangers to avoid and how to use debt in your favor.

Alex Thomas Sadler About the author: Alex Thomas Sadler
Alex Thomas Sadler is the Managing Editor of and Clark Howard Digital Products. Alex is also the host of Common Cents, a new series that makes money simple, so you can better understand and take control of your own financial life. Alex graduated from the University of Georgia with bachelor's degrees in ...Read more
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