Bad credit can affect your investment options - WALB.com, Albany News, Weather, Sports

Bad credit can affect your investment options

July 13, 2007

Albany - - Americans are using, maybe overusing, their credit cards more. New figures show the biggest jump in credit card debt in six months. 

The Federal Reserve says credit card debt rose at an annual rate of 6.4 % in May. That's double what analysts expected. Financial advisors say managing your credit is important. Getting deep in debt can hurt your retirement savings.  

"Occasionally people come to us with bad credit situations. A lot of people think they have to take money out of their qualified plan a lot of times to pay bills. It depends. Everybody's situation is different. Sometimes that's a good idea, sometimes it's not," says Financial Advisor Thomas Padgett.

He says people younger than 50 often have to pay big bucks to the IRS if they withdraw from 401-K's or IRA's to pay off credit bills.

He refers people to debt management advisors or Consumer Credit Counselors to put them on the right track.

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