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Everyday Cheapskate: 4 Good Reasons to Kick the Credit Card Habit

Mary Hunt on

There are many reasons not to carry credit card debt. The most obvious is that it's really expensive. And here's a reason often overlooked: It seems so much harder to work for money you've already spent.

But what if you do not carry any credit card debt at all? There are some who would say it is perfectly reasonable to use credit to pay for everything, provided you are able to pay it back down to $0 during the grace period.

Sure, that makes for easy record-keeping, plus all those points, miles and cash rewards that many credit card issuers offer. Even so, it's a habit that can have a negative effect on your financial situation.

You need to kick the credit card habit for these simple reasons:


The more you use your cards, the more likely you are to make a mistake. All activity -- good or bad -- is reported to the credit bureaus and lands in your credit file. That information is then compiled into a three-digit number that can change daily -- and be used to determine how much interest you will pay on your mortgage, what your insurance premiums will be and even if you'll get the apartment or job you've applied for.


Credit scores -- like it or not -- have become a kind of character reference. If your score could use a little help, kick the credit card habit and your credit score is likely to improve all on its own.

According to Credit Karma, "FICO score ranges vary -- they can range from 300 to 850 or 250 to 900, depending on the scoring model -- but higher scores can indicate that you may be less risky to lenders (and others)."

To get a rough idea of your FICO credit score, you can use the FICO Score Estimator. The calculator is free. Or you can purchase your credit score from On the FICO score range, anything over 740 is good. Higher than 760 is great.



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