August 31 2016
Are you experiencing difficulty when it comes to getting your credit card debt under control? If so, don’t feel ashamed. In fact, millions of Americans are currently struggling with getting credit card balances under control. While this may be a shared experience, you should actively strive to avoid scenarios that result in such situations. The following is a list was adapted from Your 650 Score and outlines the most common and detrimental credit card mistakes millions of consumers regularly face.
Mistake #1 – Paying Only the Minimum Balance
When it comes time to pay your bills, it can be tempting to only send in the minimum payment. While you may think this is fine, doing so actually results in you paying more money in the long run. If you only make the minimum payments, even for a small credit card balance, you’ll never actually repay the debt. Instead, your debt will continue to grow. This is especially true for those who have high interest rate cards.
Mistake #2 – Using Credit Cards for Everyday Purchases
While it may be tempting to fill up your car or purchase groceries using your credit card, doing so can result in a massive accumulation of credit card debt. In order to truly keep your debt under control, you should strive to pay for everyday items in cash. The only reason why you should use your credit cards for such purchases is if you can immediately pay off the entire balance before the month’s end. If you’re unsure of being able to do this, it’s best to keep your plastic at home and pay with folding money.
Mistake #3 – Relying on Credit Card Rewards
Credit card companies are tricky. They allure many customers by the promise of excellent perks by using their card for daily purchases. In fact, many credit card companies “reward” you for such spending habits by giving you a specific cash-back allowance or by “earning” points. While this is tempting, if you’re looking to curb your credit card debt, you should avoid falling for these traps at all costs. In most cases, the rewards don’t offset the amount of interest your balance will accrue.
Mistake #4 – Accepting a Cash Advance
It may seem tempting to accept a cash advance from your credit card, but by doing so, you’re entering into a very dangerous realm. The majority of credit cards offer cash advances, but at astronomically high interest rates. In fact, some interest rates for such purchases can be as much as 30 percent. While you may think you can pay it off in time, the reality of the situation is typically far more grim.