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How much credit card debt is okay?

"How much credit card debt is okay?" That's what nearly every consumer with a credit card balance wants to know.

The simple answer is that having minimal credit card debt is the best policy. The more complex answer: "it depends." How much credit card debt is okay for one person may not be okay for the next – it all depends on your financial situation, your spending habits and your overall credit limits.

To determine how much credit card debt is okay for you personally, it's helpful to consult with the certified credit counselors at American Consumer Credit Counseling (ACCC), a nonprofit organization providing free credit counseling to consumers. We can help you better understand your financial situation, develop a plan for paying credit card debt off as quickly as possible, and help you learn how to avoid debt in the future.

How much credit card debt is okay:

Try to prevent a situation where your monthly credit card debt payments are greater than 10% of your average monthly income.

How much credit card debt is okay for my credit score?

To figure out how much credit card debt is okay for your credit score, you'll need to know what your overall credit limit is. Generally, having zero balances or low balances compared to your credit limit demonstrates that you can use your credit wisely and your credit score will not be affected. But with higher balances — typically more than 30% of your overall credit limit — you'll begin to see your credit score take a dip.

How much credit card debt is okay for my financial situation?

Understanding how much credit card debt is okay for your credit rating is one thing, but knowing how much credit card debt is okay for your personal financial goals is quite another.

While using credit cards can be a useful strategy for dealing with financial emergencies, there simply is no good reason to carry a balance on your credit card. The amount you pay on interest each month is money that you're not able to put toward things like education, buying a house and saving for retirement. Paying off high interest credit cards as soon as possible is one of the best ways to achieve your financial goals.

Learn how much credit card debt is okay with help from ACCC.

At ACCC, we can help you create a budget and a plan to pay off your debts and learn to avoid debt in the future. We'll detail all the pros and cons of various approaches to pay off debt, from credit card debt management to debt settlement and credit card loan consolidation. And we'll direct you to resources that can help you manage money more effectively in the future in order to reach your financial goals.

Learn more about managing credit card debt with help from ACCC, and get answers to questions like "What is loan consolidation?" and "Where can I get a debt consolidation loan?"

American Consumer Credit Counseling (ACCC) is a nonprofit organization providing free credit counseling and financial advice and information on a variety of strategies for managing debt, including ways to consolidate loans and credit cards. Our counselors can also direct clients to resources for student loan assistance and help to explore the many options to repay student loan debt, including student loan debt consolidation, student debt forgiveness programs, deferment and forbearance options, and student loan programs that can lower a monthly student loan payment. After reviewing a client’s financial situation and goals, ACCC counselors can offer advice on the most effective ways to consolidate student loans, managed defaulted student loans and qualify for a student loan forgiveness program. We also offer low-cost debt management programs and free educational materials, including a debt consolidation calculator.

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