Many Americans struggle with the idea of how to utilize credit properly. Is it a thing to have debt and pay it down over time? Can it help reduce debt over time or will it cause more trouble than it’s worth? Once you have debt, can you use other lines of credit to pay it down without hurting your bottom line? These are all valid questions to have when considering what to do with debt and how to pay it off once you are in it. Here are some pros and cons to help you decide what to do with your debt and if using lines of credit to pay off debt is a good strategy in the long run for the financial heath of you and your family.


1. You will build your credit by using it.

2. Rewards programs can be very beneficial.

3. Credit gives you more options when purchasing things.

4. You can qualify for low introductory interest rates.

5. You can dispute errors.

6. Using credit to purchase items give you security that cash cannot.

7. It is good to have lines of credit you can use in emergencies.

8. You can pay for large purchases over time, rather than all in one payment.

9. Some lines of credit have a delay in payment start dates.


1. Most cards have high interest rates long term.

2. You can get in over your head with the amount of debt you end up in easily due to false feeling of having a higher budget than you do.

3. Your future income will be reduced from paying down the line of credit.

4. Too much owed debt can lower your credit score.

5. There is risk of fraud when using credit.

6. Applying for too much credit can lower your credit score.

7. There are often sneaky fees to be aware of when using credit.

8. There are often late fees for not paying on time.

9. If you don’t pay the amount owed each month, the debt will go into collections.

When most people think of credit, they think of using credit cards, but this is not the only form of credit you can take. There are personal and business loans you can take to consolidate debt and you can often get a lower interest rate than you would have on your credit cards. This will allow you to pay off the debt over time without paying as much in interest as you would with individual credit cards. If you own a home, you can also refinance and use the money to pay off your debt. This way you are only making payments on your mortgage and not carrying a large line of credit with a high interest rate.  There is also an option to do a balance transfer. If you have good credit, but also have debt you are paying off, many times, credit card companies will offer balance transfers. This will allow you to consolidate your lines of credit and pay a lower interest rate for a promotional period. These are all options that make using credit worthwhile for paying down debt over time along with the list of pros above, as long as you are smart about getting into debt and paying it off, it can be helpful when you need a bit of extra money.

Looking at the other side of things, if you are not smart about getting into debt and paying it off over time, you can end up putting yourself and your family in a very difficult financial situation using credit for bills. When considering a personal or business loan, make sure you are getting a lower interest rate, and that you can make the payment you are setting up. The same thing goes for doing a refinance. You are using your home for collateral. Make sure you can make the payments and have budgeted for the new amount before closing on the refinance. Having debt can be a big enough problem without putting your home in danger as well. As far as the balance transfers go, it is a similar situation. Make sure you can make the monthly payments, but not just paying the minimums. You can to make sure you can pay off the amount you have transferred within the promotional period. If you don’t the interest rate will spike after the promotional period is over and that will put you in a similar situation to where you were before you did the transfer. You can also try to transfer the remaining balance again before the period is up, but know you will have to pay a transfer fee each time you do this. Making sure you are responsible about paying off your debt is a big part of using credit to pay down debt amounts over time.

So what happens if you have debt you can’t pay and it is in collections? Do you file for bankruptcy and give up? That is always an option, but it is one that will put your credit down the tubes for 7 years. There is another option. Debt negotiation is an option for those who have debt in collections. You can call and negotiate the amount you can pay with the third party debt collectors. Then set up an affordable payment plan to pay off the debt and stop the collection calls. If you don’t feel comfortable making the calls on your own, you can contact a debt negotiation company to call for you. They will charge a small fee for the amount they save you, but it is a good option to get the lowest amount. Make sure to only work with a debt settlement company that does not tell you to stop paying your other bills. Letting bills go into collections will hurt your credit. Doing a settlement with bills that are already in collections will help you as long as you don’t let your other bills go into collections in the process.