About seven in 10 American citizens have at least one credit card. These cards are helpful for everyday transactions, especially as having physical cash is becoming even more antiquated. The problem with credit cards, however, is that it’s a lot easier to get into financial trouble.
Whether you’re a college student or a hardworking professional with a great job, anyone can get into serious debt. And it can be incredibly difficult getting out of debt. Paying off your card or cards will certainly help, but you’ll have to do so much more. You’ll need to learn how to properly budget, how to prioritize payments, handle your checking accounts, savings accounts, emergency accounts, and so much more.
Unfortunately, even for those who are financially responsible, there are all kinds of mistakes that can be easily made when getting out of debt.
Here are some common mistakes people make when paying off credit card debt:
- Spending like you used to — For the most part, your aggressive spending is probably what got you in debt in the first place. So it makes sense to change those spending habits when you’re trying to get out of debt — but a lot of people don’t. They might pay closer attention to their debt and accounts, but they’ll shop at the same expensive stores, eat out regularly, and do everything else the same because it’s comfortable. You must avoid making these spending mistakes if you’re serious about getting out of debt and better handling your money.
- Attempting to do everything on your own — Though getting out of debt is your responsibility, you shouldn’t try and dig out all by yourself. No one wants to ask family members or friends for loans, but there are credit counseling agencies that can help you handle every aspect of your finances, from your overall debt to proper budgeting.
- Closing accounts after they are paid off — You should be paying off your accounts, but you should not be closing them afterwards. The credit scoring systems involve how much money you owe, yes, but also how much credit you have available. Having credit and not using it shows restraint, which will subsequently improve your credit score.
If you want to learn more about getting and staying out of debt, and are ready to set up a credit union account, give us a call right away.