When It's OK to Have Credit Card Debt
One of the most important practices we preach when it comes to credit cards is paying the balances off each month. This is because credit cards charge among the highest interest rates in the debt markets, outside of payday loans.
Your credit score could suffer as well if you carry a balance. Even if you're paying the monthly minimum on time, your credit utilization -- the ratio of debt to credit limit -- will increase as you rack up more debt. Credit utilization accounts for about 30% of your credit score, and people with the best credit scores typically stay below 20%.
But there is one time when it's OK to have credit card debt. In fact, I'm currently carrying a few thousand dollars of credit card debt right now. The secret is the credit card interest rate is about the same as my interest in The Real Housewives of Beverly Hills -- 0%.
Source: Fool.com
