Debt isn't all bad
But being debt-free isn't all it's cracked up to be. In fact, considerwhere going into debt could actually help you get ahead: Financing an education and buying a home.
"The income advantage provided by post-secondary education makes student loans one of the few forms of debt that can pay off for the borrower over time,"."Additionally, interest on Federal student loans is relatively low, and often, that interest can be deducted on your taxes." Payments for this debt can also be paused if you're in a financial emergency, or forgiven completely in some cases, like if you're a public-service worker.
Likewise, if you can get a good interest rate on your mortgage that'll keep your monthly payments at or below 30% of your income, you're in good shape to build some equity over the long-term. You can also deduct mortgage interest on your taxes.4. Having multiple credit cardsIt may seem financially reckless to have a wallet full of credit cards, but it's actually smart — so long as you're paying your balances off in full every month.
"That percentage is very, very influential in your credit score," explains Ulzheimer."People say that you're in good shape if you keep your utilization within 50% of your available credit, or 30%, but really, it should be below 10%." Available credit counts all the cards you have: If you have one card with an $8,000 limit and one with a $6,000 limit, your total available credit is $14,000, even if you only spend $1,000 a month. With a single card, you have no unused credit cushioning the impact of your spending. The closer you get to your limit, the harder the hit on your credit score.
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