Millions of Americans find themselves mired in credit card debt that can severely impact their credit scores and the opportunity to secure the ability to make major purchases, such as a vehicle or a home, in the future. The credit reporting company Experian notes that those with poor credit use nearly 80% of their available credit limit on the cards they carry, which creates considerable debt and higher minimum payments each month.
If you find yourself bogged down with severe credit card debt, you may improve your situation by breaking a few bad habits which could result in lower monthly payments and greater peace of mind.
1. Ignoring your credit card statements
While technology allows you to go paperless and receive your credit card statements via email, this may also cause them to either get lost in the shuffle of multiple emails or make it simpler for you to ignore or delete them due to anxiety caused by your financial situation. However, reading your statements carefully can help you pinpoint questionable charges and track your interest rates, which may increase with missed payments.
2. Carrying cards with you
If you have credit cards that you keep in case of a financial emergency, such as an unexpected car repair, then it is wise to keep them at home in a secure location instead of carrying them with you in your wallet. Impulse purchases that you buy on credit are often a simpler decision than those you pay with cash, as you can always worry about the bill later. Keeping your credit cards at home can reduce this type of spending.
3. Avoiding your FICO credit report
If you have a low FICO score, this may make you want to ignore your credit report, but this may do more harm than good. Examining your score may help you discover discrepancies that could be affecting your overall score.
Creating a monthly budget may also assist you with breaking bad credit habits. Consider using a phone app that tracks spending and payments for you.