Consumers have been fascinated with credit cards since the mid-1950s. While the concept of credit heavily appeals to today’s consumers, there is a great deal of risk associated with the overuse of credit cards. 

In this article, we’ll review the five mistakes that can sink your credit score and add to your debt. We’ll also discuss strategies you can implement today to help improve your credit.

Mistake #1: Embracing the “free money” mindset 

The first step to improve your financial situation is to evaluate your mindset regarding money, credit, and debt. If you think of credit as “free money,” you might struggle to get ahead financially. This mentality can have a disastrous impact on your wallet. 

You can avoid this pitfall by shifting your mindset around credit. Consider viewing credit cards as outstanding debts and prioritize paying the balances off in full each month to save on interest costs.

Mistake #2: Making late payments 

While this step may seem obvious, the reality is that many people are struggling financially in the wake of the pandemic. Thousands are amassing credit card debt to stay afloat financially. Many people are facing a grim reality: they can no longer afford their monthly credit card payments.

Due to these trying times, many lenders allow consumers to defer or lower their credit card payments to keep balances from ballooning. If you’re struggling to make your monthly payments, the best thing to do is contact your lender- they will help you evaluate your options. 

Mistake #3: Only paying the minimum 

If you use your credit card frequently but only pay the minimum required each month, you may find yourself in a debt cycle that will be difficult to break.

It is beneficial to pay more than the minimum payment to knock your balance down as quickly as possible. Additionally, it’s crucial to stop using your credit cards while working to pay them off- as continuing to spend on the cards will slow down the repayment process.

Mistake #4: Not all cards are created equal 

Many cardholders are unpleasantly surprised with the realization that the interest rate on their credit card is sky-high. When you sign up for a card, it can be easy to slip into the “free money” mentality and not realize the detrimental effect credit card interest can have on your finances. Try giving your lender a call to inquire about lowering your interest or apply for a new card with better rates.

Mistake #5: Not checking your credit reports 

Many consumers don’t stay on top of checking their credit reports. While it’s not necessary to check it all the time, checking your credit at least once a year is crucial. It’s important to keep an eye on your credit to review your account and payment history for accuracy.

Credit doesn’t have to be complicated. 

Though it can seem daunting, improving your credit and escaping debt is possible. Are you looking to save money and earn cash back for spending you already do? Be sure to visit our website at http://greatcanadianrebates.ca/ for exclusive money-saving offers.