Credit cards are bad when you use them incorrectly. But when used right, they help us increase our credit score.

Many people would say that you don’t need a credit score if you are not going to borrow any money, but that is not always the case. This is one of the main reasons I do not follow all the advice of Dave Ramsey.

There are many other people that believe that you do not need to have credit cards and for some, that may be the case. It does stop impulse spending. However, if you are ever thinking of securing a mortgage or using a low interest or zero interest car loan to pay for a new vehicle you would need a good credit score.

Many Reasons for Keeping Good Credit

Credit scores are used for all types of things, employment, apartment checks, even some utility companies use creditworthiness to determine if you are required to pay a down payment.

Of course, this is not what I am advocating in this post. Having good credit will also help you get out of debt faster. Why you may ask?

When I started the journey to get out of debt I had several credit card accounts that all had variable interest rates. Some of those rates were as high as 26.49%. With a balance of $5k and the minimum payment being $172 I would be paying $62 towards my principle each month while accruing $110 in interest.

Interest Will Keep You in Debt

You can see why with that math you will always be in debt. The credit card companies want you to be in debt. They make $22 per every $1000 left on the card each month.

So how can we use credit to our advantage when paying down debt?

My credit score is now in the high 700s. It took a while to get there but in doing so I decided to move my higher interest cards to one zero interest balance transfer card. I spent a little time researching the best cards. Went on a few different websites and found one that would work well.

Zero Interest Transfer Card

Since I already had the Costco Citi card I applied for a Citi Simplicity. Within a few minutes of the application, I was approved for a $16k limit at 0%. They do have a bit higher transfer rate at 5% but moving my 10k debt from Capital One to the Citi will ultimately save me quite a bit of interest with both cards.

Now I have twelve months to pay down the balance without accruing any additional interest. This also gives me a goal to put as much as I can to this to pay this off by December. A full four months earlier than anticipated.

An added reward, the additional credit reduced my debt on two cards freeing up a percentage of my debt and added an additional amount further reducing my credit usage, which accounts for 30 percent of your credit score.

While this did not reduce my overall debt it did allow me to reallocate my resources to the smaller higher interest debt and give me a bit more time to pay off the rest. This has accelerated my debt repayment plan since I have paid off several of the smaller debts in the meantime.