If you are somehow dealing with high credit card debt, you are not alone. Millions of Americans struggle with credit card debt every day. In 2020, Americans had an average month-to-month balance of over $ 6,000 in credit card debt. The economic impact of the COVID-19 pandemic, with extensive lockdowns and millions of unemployed or underemployed Americans, has no doubt made the situation worse. If you are in that credit card debt pit, you can find your way out. However, it often means addressing some of the behaviors that got you there in the first place. Here are four habits that you need to address if you want to leave credit card debt behind you forever.
Habit 1: You only pay the minimum due each month
One of the bad habits many people have with credit cards is only paying the minimum balance each month. If you only make this minimum monthly payment, you will still accrue interest, which will affect your total debt balance. You could even get a higher balance at the end of each month. If you only pay the minimum amount, you may get a high credit card balance even if you stop putting additional fees on the card. Instead of making the minimum payment, try paying the entire balance each month. If you can’t, try to pay as much as you can.
Habit 2: You ignore what you say
Another bad habit that credit card users have is ignoring their statements of account. If you don’t bother to check your bank statements when they come in, you won’t know how much you are charging each month or how much your balance will be. You will also see no errors, potential fraud or changes in your APR if you have a variable rate card. Instead of ignoring your billing statement, check it out every month and be part of your budgeting process. Review all of your credit card statements related to the rest of your bills and all activities related to saving and investing. By doing this, you can find a fee mismatch and take action on your credit card balance before it gets out of hand.
Habit 3: Having too much balance
As mentioned earlier, many Americans have large amounts of credit on their credit cards. If you are one of them, it can harm your financial situation. Large balances mean high monthly payments that can affect your ability to pay other bills or invest and save for retirement. Having high levels of credit on your cards can also affect the credit usage component of your credit score and limit your ability to get a mortgage or new car loan. If your credit card balance has gotten higher than you’d like, try to get it back as soon as possible. If you don’t think you will be able to clear the balances simply by making more payments, consider a debt consolidation or even the debt settlement services offered by National Debt Relief. The sooner you tackle high credit card balances, the better.
Habit 4: Pay your credit card bills late
Another bad habit people have when it comes to credit cards is late paying their credit card bills. If you have a busy life and are struggling with multiple credit card bills, it can be easy to get lost until they are too late. You can collect additional interest and late fees if you don’t pay your credit card bills on time. Additionally, credit history, or how well you are paying your bills, is one of the most important factors in calculating your credit score. As a result, if you fail to pay your credit card bills on time, it can be difficult to access a lender’s balance later. If you’re having trouble paying your bills, try using an online bill payment service that will give you prompts or texts to remind you when the bills are due. You may also want to use debt consolidation or a balance transfer credit card to combine all of your outstanding credit cards into a new single loan so that you only have to worry about one bill each month.
Leave those bad habits behind and use your cards wisely
You will never climb out of that credit card debt mine if you don’t leave those bad credit card habits behind you. However, it’s not difficult to pay a little extra attention and put more effort into managing your credit cards every month. That way, you will become aware of the balances you have with you and turn your credit cards into useful financial instruments, rather than into high-credit monsters that add to the financial burden you already carry around with you every day.