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Home > Blog > Credit Card Debt: What Not to Do

Credit Card Debt: What Not to Do

Posted by: Gene M. | Jan 15,2008

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There’s a fair amount of info on this site and blog about how to get out of debt and save for the future: whether it’s for retirement, buying a home, or just to add to an emergency fund. Let’s take a look at that from another angle: what not to do. Most know that they should pay above the minimum on credit cards to get out of debt faster. Here are things you should avoid doing this year.

Don’t apply for a new credit card. This is how people get into trouble. They apply for a new credit card with lower rates, thinking that they’re being progressive by using a lower rate card. What happens is that they end up owing twice as much every month on all of the cards combined, which means the interest on those cards lingers for longer. Transferring a balance and then charging new items on that card also makes little sense.
Don’t use your cards. One mistake that people make is pay off a large chunk of their credit cards and use that as an excuse to start charging again. This is similar to someone who loses ten pounds who then justifies eating a week’s worth of desserts. You have to stick with the same game plan if you want to get out of debt.
Don’t get cash advances. It’s the worst possible use of a credit card. If you need cash, get a different type of loan, don’t get it from a credit card. The same goes for credit card checks – they basically work the same as cash advances.
Don’t wait to pay a bill. When you get it in the mail, pay it. This will alleviate problems with late fees.
Don’t pay the minimum. However, don’t pay so far above the minimum that you’re not saving any liquid funds either. Try and have a healthy balance of both saving and debt reduction.