Tips to Manage Credit Wisely

Americans seem to be learning their lesson when it comes to using credit cards wisely, two new studies indicate. The average American has fewer credit cards, is relying on them less, and is trying to pay down their debt—which, in many metropolitan areas, still exceeds the national average.

In about 65 percent of the top 20 major metropolitan areas, average debt per consumer exceeds the national average of $24,775, according to a study by Experian, the global information services company. But while many urbanites may have more debt than average, they're also making strides toward using their credit wisely, a second Experian study reveals.

Here are some tips to help manage your credit:

• Pay bills on time. If you have an overdue bill, an unpaid debt or a tax lien, pay it off.

• Use your credit cards responsibly to demonstrate that you can manage credit well, but keep balances low on all your cards and revolving credit.

• Review your credit report 60 to 90 days before making a major purchase. Do not open or close accounts, but concentrate on paying down balances.

• Pay off debt rather than moving it around. Also, do not close unused cards as a short-term strategy to improve your credit score. Owing the same amount but having fewer open accounts may lower your utilization ratios and your credit scores.

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