Page 26 - MCUL: Contact Magazine - Q4 2019

WORST ADVICE ABOUT DEBT

Advice is cheap. But taking bad advice can end up costing you, big time. Have you or your credit
union members heard any bad advice when it comes to debt? If so, now is the time to rethink
what you or they have heard and share better advice.

1 CARRY A BALANCE ON YOUR CREDIT CARD EACH MONTH TO BUILD YOUR CREDIT SCORE.

Your credit card balance makes up only a small part of your Only open credit cards that offer perks you’ll use (hint: cash
BAD ADVICE payment history on lines of credit (credit cards, car loans, BETTER ADVICE back!) and use them like debit cards. Only spend what you
overall credit score. In fact — and more importantly — your
have in the bank and always pay off the monthly balance.
student loans, mortgage) makes up a whopping 35% of your
This will help build a strong credit score in conjunction with
FICO score. Rolling over a credit card balance from month to
month only forces you to spend money on interest. on-time payments on other lines of credit.

2 COLLEGE DEBT IS WORTH IT.

Research the expected salary of jobs you’re considering,
how much debt you’ll take on to get your degree, if
This is more of an incomplete statement than bad advice.
BAD ADVICE A college degree that causes debt could be worth it if the BETTER ADVICE graduate school is necessary, and the options for state
versus private school and community college. The cost of
associated career can pay off the debt and offer some level
college debt may outweigh the possible benefi ts. Another
of job security. But many factors, such as the economy,
idea is to calculate what your payments will be post-
affect the soundness of this advice.
graduation and see what you’ll miss out on by having to
make those payments.

26 FOURTH QUARTER 2019 I CONTACT

12/18/19 1:50 PM
143171_Contact_Q4_19_F4.indd 26 12/18/19 1:50 PM
143171_Contact_Q4_19_F4.indd 26