Debt can’t get right no matter how hard you try nothing seems to stop debt from becoming an albatross around your neck. What can you do with debt? Seems like you can’t live with debt, then on the other hand you can’t live without debt.
Is there any winning in sight when debt growing out of sight? Is there any relief in sight for your pocket book or wallet or check book when your debt keeps rising?
In the past the philosophy regarding debt was that you pay debt down to zero. Get rid all of your debt and you will attain an excellent credit score with the three credit bureaus who monitors those types of issues.
We give the credit bureaus too much power over our lives and they dictate what is good and what are bad debt and an excellent credit score. Now the credit bureaus have changed their current philosophy again and now it is that you should keep debt and thereby keeping more debt this debt is supposed to increase your credit score.
Now having more debt should help you attain more credit. Also paying off your oldest debt is not a good thing either. This paying off of your oldest debt they will decrease your credit score. In the past paying off your oldest debt will increase your score. So beware of this newest issue regarding your old debt.
Too little debt or no debt is now considered a bad thing for your credit score. Also too much debt is considered bad for your credit score as well. So what do you do to maintain and even balance as to what it considered a good debt ratio and a good credit score? The experts say that your debt ratio on all of your debt should be below the fifty percent barrier to be consider a good debt ratio and to get a good credit score.
Any payments going out from your monthly income above that fifty percent ratio on your debt ratio will get you dinged as a bad credit risk. What they are saying is that you have too much of your hard earn money earned from your paycheck or incoming income going out on all of your bills combined together which is considered your debt and this is not a good thing.
So what do you do to maintain a good debt ratio and credit score? You should monitor all of your expenses. Know what, where is your hard earn income is being spent. Do not use the credit card so often. Stop always using you debit card to make purchased because most if not all people will not keep track of what you are spending your money on.
Using the debit card is like invisible money and using invisible money it comes and goes into the clear blue sky. Using the debit card so often you will not keep track of how much money you spent until you get the bills and then it’s too late, because the money is all spent. So use cash as much as possible, because you can see what your money is being used for.
Once the money is gone you also know that there is no more until your next paycheck. Using cash makes you accountable to yourself as to how much money you are spending at a given time. I know that the credit merchants want to get rid of cash, because if cash is not in use they can charge all of these debit card fees and they can make millions or even billions of dollars in transactions fees.
Debt is something we all trying to get right and at times in all of our lives we do accumulate too much debt. Trying to keep up with the Joneses we spend too much and then there are times we are just plain foolish with our money. Taking care of the home, vacations, holidays, travel and school payments for the kids, we just get in over our heads in debt.
Debt can’t get right when you need to, but try and manage debt as much as possible, then try and maintain a balance of debt and money spent. Do the best you can and remember cash is king, because cash helps you monitor what you spend, because what you do not have you cannot spend.