Having a credit card can be an asset for many people, especially if you’re just starting out and need to establish credit. But to reap those benefits, you need to use your credit cards in the correct way. If you don’t, you could easily ruin your financial future and end up needing debt relief options. If you do need help paying off your debt due to credit cards, we can offer debt consolidation refinancing to help you. However, if you want to avoid needing credit card debt management solutions altogether, here are three common credit card mistakes you’ll want to avoid:
- Having too many cards
Some consumers have the idea that obtaining more credit cards grants them a more substantial financial cushion. But you should never think of your credit cards as a form of supplemental income. The greater number of credit cards you own, the more likely it is that you’ll end up needing professional debt management solutions. Having too many cards can actually have a negative impact on your credit score. Using just one credit card makes tracking your expenses a lot easier, but the average consumer has an average of 3.5 credit cards. If you’re in a good financial position, having this many cards isn’t usually an issue. But if your balances are increasing, getting another card will do much more harm than good.
- Paying off only the minimum each month
While you may be tempted to pay that smaller monetary amount listed under the “minimum payment” section, that’s one of the biggest mistakes you can make. Remember that credit card companies want you to pay only the minimum on your monthly bill. Doing this is not in your best interest. By making only the minimum payment each month, you’re likely incurring additional interest and debt. That means that you’re actually increasing the cost of whatever you paid for using that card, and it will take you much longer to pay off in the long run. Pay your balance in full every month and avoid minimum payments if at all possible. That way, you’re essentially borrowing money from the credit card company without any extra financial consequences.
- Making late payments
While making a late payment is better than not making a payment at all, you’ll have to deal with a late payment fee and potential damage to your credit score. Make sure you send your check or pay your online bill with plenty of time for processing. Your payment history actually accounts for around 35% of your credit score, so you should pay close attention to the date (and even the time of day) your payment is due. If you pay late, it will be harder for you to get a loan in the future, and having to pay unanticipated late fees could have a huge impact if you’re already struggling with your finances.
If you’ve gotten yourself into financial trouble due to credit card mistakes, there are ways for you to take charge of your debt and regain financial freedom. Our debt consolidation options make it easier for you to pay off debts you owe from your car loans, home loans, credit card debt, and more. To find out additional information about debt consolidation and how it can help you, contact us today.