Three Tips for Teenagers with Credit Card Debt

A Credit Article Contributed by Kris Griebe

I Just Got My First Credit Card, Now I Am in Debt! Help!

Calm down, credit card debt can be handled easily, as long as you understand the process. If you are a teenager, then you probably just got your first credit card, maybe to help you start out right. At this stage, you have a significant advantage, your credit card debt is probably not very high. Nothing that a little bit of hard work cannot cure. You should keep in mind that having a credit card is a big responsibility, one that will affect nearly every aspect of your life.

You have just started out, and there is no reason to damage your credit now. The goal is to be able to have the financial freedom a credit card can provide, all the while strengthening your credit history by making prompt and on-time payments to your credit card company.

I Went on a Wild Shopping Spree, Now My Credit Card Debt is Growing!

Yes, your credit card debt will grow. This is because you are charged interest on all your purchases. What you need to remember is to stay within your budget. Ideally, you want to spend no more on your credit card than you can pay at the end of the month when the bill is due. This makes sure you start fresh every month, and do not have to worry about debt carrying over and growing until you can no longer manage it! Most importantly, when you pay the full balance each month you DON'T pay any interest. This means that you have no addtitional cost for that great bargain you charged.

If you can afford to pay some interest so you can buy that sparkling new television without having to have all the money up front, it's great to have a credit card. It lets you pay things off over time. As long as you are committed to making your payments on time, and you realize that you'll be paying more for that television because of the interest the credit card company will charge, you have nothing to worry about.

Should I Pay Only the Minimum Due on My Credit Card Debt?

You can, but it will be much better if you pay more. Every time you pay more than your minimum monthly requirement, the amount of interest charged on your next bill will be lower because it will be figured on a smaller amount of debt. If your minimum monthly payment is 15$, try paying 30$. This not only reduces your total interest, but it shows your credit card company that you are willing to pay off your debt in a timely manner.

It will also show on your credit report when your credit card agency sends in their monthly reports. Later on, when you want to get a loan or another credit card, your potential lenders will notice that you consistently pay more than is required.

Following these few simple tips, paying your monthly bill on time, and not spending more than you can afford to pay off, will keep you on the right track to developing a healthy credit rating. In the future, you will thank yourself for your diligence when you get approved for that big loan to buy your first brand new car, or maybe even your first house.