2000 Credit Card Debt: How Much Credit Card Debt is Bad?

What about $3,000 in credit card debt? $3,000 owed on credit cards is still lower than the national average. And again, I don't want to say that any debt is "bad", because sometimes we have no choice but to get into debt. So don't look at it as bad or good.

Look at it as "Can I afford to pay this off, and if so, when?". This will help you come up with a better financial plan, versus just worrying about the debt.

Whew, $50,000 in credit card debt?? This is well over the national average of debt and can be harder to pay off — especially if you have a lower income or high-interest rates. But while I don't advise being in $50,000 of credit card debt, it is possible to work out and pay it off if you make the choice!

Most credit lenders prefer if you keep your credit utilization to below 30%. So if your credit card has a limit of $10,000, you shouldn't be using more than $3,000. In fact, the higher your spending on a credit card, the more it impacts your credit score. So the lower the better.

You may be surprised to know that those with the highest credit card debt are adults 75 or older. Their credit card debt averages at $8,100.

However, only a quarter of the people in this age group have debt. If you want to know which group has the most credit card debt, that's Gen X (45-54), with over 52% owing on their card.

This depends on your future financial goals. Closing a card after paying it off can cause your score to drop for a little while.

So if you have any upcoming goals that will require a decent credit score (like getting a mortgage), you may not want to close the card just yet.

But, if you don't plan on getting into future debt, moving, or using your credit score any time soon, closing your card may be a better option. This is especially true if you tend to be a spender and feel you'll be tempted to use it.

First, the easiest way to start paying off your credit card debt is to know how much you have and when you can pay it off. To be able to do this, you'll need to know your income and expenses — so having a budget is essential!

When you create your budget, know that it may not be perfect right away, and that's okay. Instead, focus on what you can realistically pay towards your credit card debt, and how long it will take you to pay it off based on your current income and expenses.

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Next up, focus on whatever has the highest interest rate. If you only have one credit card, this won't apply. But. if you have multiple cards with different balances, you'll want to know these numbers.

The higher the interest, the more money you have to pay each month to eventually pay the card off. So focusing on the highest interest rate means keeping more money in your pocket in the long run.

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Even if you're lower-income, it's possible to pay off your debt. It may not happen right away, and it may take you longer than the average person, but that's not what's important. What's important is reaching the goal you set — no matter how long it takes!

But remember, dollars aren't the only things that add up over time. In fact, the cents count too. And by taking your debt payoff little by little, versus trying to pay it off in chunks, you can build healthy financial habits overall. And these little tweaks and pay downs can mean saving money on interest and paying off your debt faster.

One of the best ways to do this is to round up your purchases. For example, if you spend $27.26, you can round it up to $28 and send .74 cents to your card, or round up to the nearest ten (aka $30) and pay $2.74. By doing this with each transaction, your debt payments can easily add up to at least an extra $50 or so each month!

You can do this manually, and send the money right over, or use a tool like Qapital and let it sit in savings until you're ready to use it.

As noted above, this will depend on your future goals. But, I think it's possible to keep your card open and avoid future debt. Just be sure to pay it off if you spend money on it, and keep up with your budget!

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• Free Credit Card Payoff Spreadsheet to Get Rid of Debt