Are You Making These Common Credit Card Mistakes?
Using credit cards can be a quick and easy way to purchase something with money you might not have. Below are some common mistakes that you can avoid to be smart with your credit card.
Making minimum payments
Making the minimum payment on a credit card can cause you to carry around unnecessary debt for longer than you need to, especially if you have a savings account. Like I’ve said in another post, having $5000 in savings but having $2000 in credit card debt really just means you have $3000 in savings. Pay off that credit card if you have the funds available! In addition, as the interest builds and builds on your unpaid balance, it will take longer for you to pay it off and end up being much more expensive in the long run.
Maxing out
I have no idea why people (*cough* Carrie Bradshaw) make it sound fun to have multiple maxed out credit cards. It’s not cute! Maxing out a credit card can significantly impact your credit score and affect your credit utilization rate. Your credit score is an important asset, especially when it comes to renting an apartment or buying a house. How did Carrie get that walkup on the Upper East Side with what I can only assume was a horrific credit score?
Too many credit cards
So many credit cards! We see commercials for them, stores always ask if you want to open them to save on a purchase, even college kids are targeted to sign up for them on their way to class. It’s not our fault that having multiple credit cards seems like the norm and they make signing up so easy! Like maxing out a card, having too many credit cards can negatively impact your credit score, not to mention it’s easy to lose track of your debt and when payments are due.
Charging everything to your credit card
Unless you have a functioning budget and your income can support fully paying off your credit card monthly, you may want to lean on your debit card or cash for everyday purchases and save the credit card for large, infrequent purchases that you know you can afford.
If you need help formulating a plan to tackle credit card debt, fill out the contact form at the top of the page!