It’s time to break that vicious cycle.
- Mismanaging your credit cards could cost you a lot of money.
- Keeping an eye on your credit cards’ interest rates will make it easier to use the right cards for certain situations.
- Not prioritizing saving money could make it hard to meet your goals.
Many of us are big fans of “Groundhog Day” — the classic 1993 movie where Bill Murray finds himself reliving the same day over and over again. But you may be setting yourself up for your own personal financial “Groundhog Day” without even realizing it. And so if you’ve been known to make these money mistakes repeatedly, it’s time to put an end to them.
1. Carrying a credit card balance
U.S. credit card balances hit $930 billion in late 2022, according to TransUnion. And that means a lot of people may be losing loads of money to interest.
Rather than get stuck in an endless cycle of credit card debt, aim to pay off your balances in full every month. And if you can’t do that, the answer is simple — start spending less. Either that, or find a way to boost your income to keep up with your spending habits, like picking up a side hustle on top of your main job.
2. Being late with credit card payments
Being late with credit card payments could mean getting hit with costly late payment fees. It could also mean seeing your credit score take a dive.
Many consumers don’t realize that a single late payment could have a really noticeable impact on their credit — especially if their scores are higher to begin with. So mark your calendar with your credit cards’ due dates to avoid being late with your payments due to forgetfulness. And check your credit card balances weekly to avoid being late due to a lack of funds to make your minimum payments.
3. Not paying attention to your credit cards’ interest rates
Sometimes, carrying a credit card balance is inevitable. If your car needs a $1,000 repair, for example, and you don’t have the money in your savings account to pay for it, you may have no choice but to charge it on a credit card and pay it off as you can.
But don’t just choose a card at random from your wallet. Instead, take a look at the various interest rates attached to your cards, and go with the one whose interest rate is lowest.
4. Waiting until the end of the month to move money into your savings
Some people spend their paychecks week after week and hope there’s money left over for savings purposes at the end of the month. But if you stick to that system, you may find that your savings don’t grow at all.
A better bet? Set up an automatic transfer at the start of the month so that money moves out of your checking account and into your savings before you get a chance to spend it. And if you have a complete emergency fund and are focused on retirement savings, set up an automatic transfer to your IRA account instead.
It’s one thing to make a money mistake here and there, but it’s another thing to keep making the same blunders repeatedly. If you’ve been known to fall victim to these traps on more than one occasion, it’s time to break that cycle — and set yourself up for financial success.
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