Credit cards have revolutionized the way modern society makes purchases. However, while credit cards are a valuable tool that can help you manage your finances, there are several mistakes you may be making without understanding how they will hurt your future credit or lead to an eventual bankruptcy filing. Keep reading to find out more about these common mistakes and how you can avoid them for smarter credit card habits.
You Pay Only the Minimum Balance
Consistently paying only your minimum balance is a common credit card mistake that results in high interest payments over time, which can cost you hundreds or even thousands of dollars. Keeping track of how much you owe and its associated interest is the best way to develop a plan for payment that will minimize interest and help you save money.
You Frequently Pay Late
Paying your credit card late also increases the amount you owe over time. Credit cards often include late fees and additional interest on payments made after their original deadline. Paying late will also hurt your credit score, which affects the type of loans and interest rates you can secure in the future. Frequent late payments may even raise your minimum payment amount over time. If you’re having trouble paying on time, talking to a debt attorney or financial advisor can help you get back on track.
You Never Read Your Statement
Reading your credit card statement regularly is an important part of managing your finances. Regularly inspecting your statements serves two purposes. First, it alerts you to fraudulent or accidental charges that may occur. Second, regular statement inspection will help you evaluate your spending habits and remain in control of your personal cash flow and other finances.
At Cutler & Associates, Ltd., our bankruptcy attorneys in Aurora can help you manage your personal finances regarding credit cards and other forms of debt.