Did you know that you could be using your credit cards incorrectly? While trying to rack up points or earn rewards, you could be getting yourself into a more precarious financial situation than you realize.
Convenience sometimes comes with a price, including heavy fees if you miss a payment and the potential for damaging your credit score. Remember, though, that you may be able to minimize the risks by avoiding common credit card mistakes.
4 common mistakes made by credit-card holders
There are several mistakes to avoid, including:
- Missing a payment, which could lead to a late payment being reported on your credit report.
- Maxing out your credit cards, which could have a negative impact on your credit score and hinder your ability to get additional credit in the future.
- Taking out a cash advance, which costs more and has its own fees and interest rates.
- Making only the minimum payments each month rather than paying everything you can.
When you make these credit errors, there is a greater risk that you’ll stay in debt longer or dig yourself into a hole that is hard to get out of.
What should you do if you’re struggling with credit debt?
Credit cards have a purpose, but when they’re weighing you down, you have to make changes. To start with, you can make sure you’re always paying your credit cards on time. You have to pay at least the minimum.
Another thing you can do is try to snowball your debt. Pay as much as you can on one to pay it off, making sure to pay the minimums on all others. Then, roll the extra money into the payments for your next highest debt. Over time, you’ll gain speed and pay off everything you owe.
If you cannot do these things, then it’s time to look into other options like bankruptcy or consolidation.
If you can’t see a way out of debt, consider bankruptcy as a possible option
When you have credit card debt, it can sometimes be difficult to see a way out. Bankruptcy could help you eliminate credit card debt and get yourself back on track financially. This or other debt-relief options may be open to you. Look into your legal options to learn more.