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Europe and a credit card

Chris Farrell Jun 4, 2012

Question: Hi! I’m living in Europe for a year or so, but all my bank accounts are still in the U.S. I’ve been using my credit card for everything and paying off the balance monthly. Is this bad credit card behavior? Could I be hurting my credit score? Thanks! Alexa, Baltimore, MD

Answer: OK, I’m jealous that you’re in Europe for a year or so. Under normal circumstances, living in Europe is a wonderful learning and lifestyle experience. You’re there during a tragic, troubling, fascinating period when the fiscal fate of the Eurozone and its single currency hangs in the balance. You have a unique perch to watch history in the making.

As for your personal finance question, Va bene. (I learned a lot living in Florence for 6 months, but that’s about as much Italian as I can recall these days.) Paying off the balance at the end of the month is a twofer: good personal finance and good for your credit score.

I think you’re fine, by the way, but from a credit score perspective, you should know that you don’t want to put too much debt on the card every month. You should try to stay below the credit limit on the card — say, keeping it at 30 percent or less.

That said, the main discipline is to pay off the balance and on time. For this period, when you’re living in Europe, you may put a bit more debt than normal on the card. It’s OK. There are other benefits that come from managing your money the way you are when overseas.

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