Bankrate follows a strict editorial policy, so you can trust that we’re putting your interests first. Our award-winning editors and reporters create honest and accurate content to help you make the right financial decisions.
Key Principles
We value your trust. Our mission is to provide readers with accurate and unbiased information, and we have editorial standards in place to ensure that happens. Our editors and reporters thoroughly fact-check editorial content to ensure the information you’re reading is accurate. We maintain a firewall between our advertisers and our editorial team. Our editorial team does not receive direct compensation from our advertisers.
Editorial Independence
Bankrate’s editorial team writes on behalf of YOU – the reader. Our goal is to give you the best advice to help you make smart personal finance decisions. We follow strict guidelines to ensure that our editorial content is not influenced by advertisers. Our editorial team receives no direct compensation from advertisers, and our content is thoroughly fact-checked to ensure accuracy. So, whether you’re reading an article or a review, you can trust that you’re getting credible and dependable information.
You have money questions. Bankrate has answers. Our experts have been helping you master your money for over four decades. We continually strive to provide consumers with the expert advice and tools needed to succeed throughout life’s financial journey.
Bankrate follows a strict editorial policy, so you can trust that our content is honest and accurate. Our award-winning editors and reporters create honest and accurate content to help you make the right financial decisions. The content created by our editorial staff is objective, factual, and not influenced by our advertisers.
We’re transparent about how we are able to bring quality content, competitive rates, and useful tools to you by explaining how we make money.
Bankrate.com is an independent, advertising-supported publisher and comparison service. We are compensated in exchange for placement of sponsored products and, services, or by you clicking on certain links posted on our site. Therefore, this compensation may impact how, where and in what order products appear within listing categories. Other factors, such as our own proprietary website rules and whether a product is offered in your area or at your self-selected credit score range can also impact how and where products appear on this site. While we strive to provide a wide range offers, Bankrate does not include information about every financial or credit product or service.
Watch video
Anchor Intro: Depending on the situation, taking on debt can be either wise or foolish. Do you know the difference? These tips will help you decide.
Paying of the Balance: Credit cards are a necessary evil. You need to establish credit in order to have a credit history, but all too many times credit card debt turns into a monster you can’t control. The question is not whether you should open and use a credit card, it’s whether you can pay it off, in full, every month. Many people will use their credit card for everything – earning air miles or points for free travel, hotel discounts or cash-back rewards, then pay off the balance at the end of the month. If you’re not disciplined enough to do this – then you will suffer the consequences of foolish debt.
Covering loans with credit card debt: An education is invaluable and student loans have long been considered wise debt. However, if you’re using your student loan money to pay off credit card debt, you’re just stealing from Peter to pay Paul … in other words shifting one debt to another at a higher rate and prolonging repayment. That’s a foolish debt move.
Floating: If you can’t afford to buy something until your next paycheck, floating the purchase on your credit card is an option. Float is the grace period between making a credit card purchase and paying your bill in full to avoid interest charges. Again, this can be a wise choice IF you pay that balance off at the end of the month … otherwise, foolish.
Cost of not borrowing: Borrowing money is unavoidable and can sometimes keep you from losing more money … especially if the purchase is for a necessity, like a car. If your car is unsafe, breaks down and keeps costing you time and money, taking out a loan to buy a safe, reliable car is actually a wise debt as long as you buy something affordable and within your means.
Tag: Nobody wants to have debt. However, if you have to have some debt, make sure it has the lowest possible rates and fees, have a plan for paying if off and make sure it improves your quality of life, not hinders your financial growth.
Share