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The interplay between credit card debt and your credit score

With the holiday season well underway at this point, there are probably quite a few Escondido residents who are beginning to rack up credit card debt. For some people, the credit card balances will be paid off in full when January comes around, and they will go about their usual financial practices. But, for others, the debt is simply added on top of existing credit card debt, and the balances roll over every month. This can not only result in higher minimum monthly payments, it can also result in a hit to your credit score.

A recent article noted that having a plan to pay off credit card debt can help people when they are rebuilding credit. In fact, many of our Escondido readers may not know that carrying a balance on their credit cards can depress their credit scores, which, like so many dominos, can then lead to even greater financial challenges.

As people work toward paying down their debts, there are a couple of moves they can make to help limit the impact on their credit scores. One such move is to request a credit limit increase from their credit card companies. If the debtor has a good history as a customer, and they have the income to justify an increase, a credit limit increase could lead to a better credit score. Another move is to look into transferring the balance from one card to another - in many cases credit card companies may even offer zero percent interest balance transfers.

Unfortunately, not everyone will be able to take advantage of these tips. For some people, their debt load is simply too burdensome. For Escondido residents who find themselves in this position, filing for bankruptcy may be the best option in a bad scenario.

Source:, "The Hidden Bonus of Paying off Credit Card Debt," Dec. 1, 2015

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