BOSTON (CBS) – The latest Federal Reserve numbers from January has revolving consumer debt at $851 billion dollars. That is down from the high of $958 billion a few years back.

Credit is a privilege. Not a constitutional right despite what some people may think. Credit allows you to use someone else’s money, the credit card company’s, to buy the goods and services you need or want.

You are borrowing money every time you use your credit card and you do need to eventually pay it back. And if you don’t pay off your balance every month, the credit card company will charge you interest for using their money.

And if you are late in paying your monthly bill or miss a payment, the credit card company has the right to charge you late fees. And they do; $25, late again $35.

When you talk about credit you need to talk about debt. There is good debt and there is bad debt. Good debt is the kind of debt that increases your bottom line, increases your net worth. A mortgage normally would be considered good debt for it helps increase your net worth; it allows you to borrow money to buy real estate with a small down payment of your money.

Bad debt is your credit cards that you don’t pay off each month. Here you are paying for things you consume. Groceries, sneakers for the kids, gas for the car, Advil for your headaches, dinners out. And you may be paying for those sneakers for a very long time.

If you carry a $3,000 balance with a 14% interest rate, and you pay only the minimum each month it will take 20 years to pay it off. That’s longer than many marriages last.

Oh and by the way, you will pay over $3,500 in interest over those 20 years. Credit card companies just love it when you only pay the minimum.

One more thing: Education loans, yours or your kids, would be considered good debt. An education increases your ability to earn a living and the more education you have the higher your wages. Studies have shown that a college education could mean an increase in wages of $1 million over a career.


You can hear Dee Lee’s expert financial advice on WBZ NewsRadio 1030 each weekday at 1:55 p.m., 3:55 p.m., and 7:55 p.m.

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