Money Minute: How credit card debt impacts your credit score
PITTSBURGH (KDKA) — Almost all of us have had some credit card debt at one point or another.
But too much can really hurt your credit score, and that can do all kinds of damage.
KDKA-TV money editor Jon Delano explains an easy way to figure out how much you can charge without ruining your credit score in this week's Money Minute.
Credit card debt is going up. About 14 million Americans owe more than $10,000 on their cards, and one out of three of us carry credit card debt from month to month.
How much credit card debt you should rack up really depends on your financial status, but knowing your credit utilization can keep you from hurting your credit rating.
What's credit utilization? It's how much money you owe on all your credit cards compared to the total amount you're allowed to borrow.
Add up all the money you're allowed to borrow on each card, let's say that adds up to $10,000, to not hurt your credit score, borrow less than 30 percent, or in this example less than $3,000.
While it's always best to pay off your credit cards each month to have a zero balance, that's really hard to do. Instead, at least make sure you keep your overall borrowing below 30 percent.