Debt don'ts

American households owe an average of $7,117

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Many Americans are drowning in debt. In fact, after the mortgage and student loans, families are struggling to pay off their credit cards. Each household owes an average of $7,117. We break down the biggest misconceptions when it comes to our debt.

A credit card for food, one for air miles, another for points; using plastic when you don't have cash can add up to some real problems.

First off, it sounds tempting: buy some clothes, sign up for a store credit card, and save money. But if you don't pay it off at the end of each month, you'll pay interest on the entire amount you initially charged, often at a higher rate than a typical credit card.

One of the biggest debt don'ts: just because you get married doesn't mean you have to take on your spouse's debt. Although many couples do want to take on the burden together, the responsibility falls on the person who incurred the debt before marriage. Beware of refinancing if it means you will be responsible for their debt. Also, be aware that you will be responsible for any debt incurred after you wed, even if your name is not on the account.

Does a late credit card payment damage your credit score? Although late payments can bring fees, unless you're past 30 days late, they probably won't put a dent in your credit score.

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