Bad debt know-how

You’ve sealed your commitment with a kiss and a kick-butt party. And now the Visa bill is due — yikes. Debt doesn’t have to kill the mood. But if you’re like the average American (only with much better hair), you carry about eight credit and charge cards in your wallet, owe more than $7,500 and are paying around 14 percent in interest on those balances. If you paid off your credit card balance in full last month, take a bow — you’re part of the 40-percent minority who did so.

If you’re struggling with debt, clearly you are not alone. Being debt-free takes resolve and a little know-how. Step 1: Separate “Bad debt” and “OK debt” Unless your last name is Hilton, some debt is inescapable. How do you tell the difference? OK debt has an interest rate well under 10 percent — preferably with some tax advantages to boot. In the best case, the thing you bought with borrowed funds will appreciate in value.

(Think mortgage, and even that student loan.) Bad debt is everything else — from your titanium credit card to the 35-percent loan from Angoraland. Step 2: Don’t pay by their rules You’re smarter than they are — and by “they,” we mean the suits on the receiving end of your hard-earned paycheck. You know that the “minimum amount due” is cleverly calculated to keep you beholden to The Man for your entire adult life.

A $4,500 balance on a card with an 11-percent APR will take 44 years to pay off, even if you don’ t put another dime on the card. Oh, and the interest you’ll pay on that loan? A cool $17 grand. That’s why you’re going to pay by your rules. You’ve sealed your commitment with a kiss and a kick-butt party.