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Unfortunately, there is no simple answer to this as there are other factors involved in making this decision. However, it’s important to understand what a bankruptcy will do to your financial life. For one thing, it could drop your credit score by as many as 200 points. It will stay in your credit reports for 10 years although the effect it has on your credit score will diminish as the years go by. More and more employers are checking credit reports as part of the employment process so bankruptcy could actually cost you a good job. You will have a hard time getting new credit for at least two years after bankruptcy and when you do it will be "low balance, high interest credit."
Q. My child has a lot of credit card debt. What can I do to help?
Probably the best thing you could do is give him or her a lot of information about smart money management. But if you're considering paying off that debt keep in mind that you may just enable more bad behavior. But if you just can't resist doing this make the money a gift and not a loan. That way there won't be any conflict in the future about getting paid back – or not being paid back. Alternately, you could agree to give your child the money but only if she or he would be willing to sign an official loan agreement. You might also ask your child to set up automatic transfers of the payments to your checking or savings accounts. That way there will be no question about whether or not a check was mailed.
Q. What is the ideal number of credit cards to carry?
As a general rule you should be okay with just two major credit cards. One of them should be a low interest rate card for those times when you must carry a balance forward. The other should be one with a grace period. Of course, the best card would be one where there is no annual fee and no interest for some period of time. If you're concerned about your credit then two cards is a good number as well. However, it's also a good idea to have at least four credit accounts of different types. This could be your mortgage, a car loan, a major credit card and a store card. Part of your credit score is based on the types of credit you have as this shows potential lenders that you can successfully manage different types of credit.
Finally, here is a short video, courtesty of National Debt Relief, with some good information on how to manage a credit card.