5 Credit Card Habits That Keep You Broke (and How to Fix Them)
Credit cards can help you build credit and manage expenses—but poor habits can lead to long-term debt.
Learn five common credit card mistakes that keep you broke and how to fix them so you can take control of your finances, improve your credit score, and stop living paycheck to paycheck.
1. Only Paying the Minimum
Why it’s a problem: Paying the minimum keeps you in debt. It adds interest every month. You end up paying a lot more over time.
What to do instead:
- Pay more than the minimum. Pay the full amount if you can.
- Try a method like the avalanche (pay high-interest debts first) or snowball (start with the smallest debts).
- Set up reminders or use autopay so you never miss a payment.
2. Carrying a Balance to “Build Credit”
Why it’s a myth: You don’t need to carry a balance to build credit. It just adds interest charges.
What to do instead:
- Keep your credit usage low. Try to use less than 30% of your limit. Under 10% is even better.
- Pay off your card before the statement closes.
- Check your credit score often to see how you’re doing.
3. Using Credit Like Extra Cash
Why it’s risky: Using a card for things you can’t afford adds debt. You’re spending future money. Then you pay more because of interest.
What to do instead:
- Make a budget that fits your income.
- Only use your credit card for things you can pay off right away.
- Use a debit card or cash for extras.
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4. Not Checking Your Statements
Why it’s a problem: You might miss charges or fraud. Small fees can add up. Mistakes can go unnoticed.
What to do instead:
- Read your statement every month.
- Set alerts for big purchases or when you’re close to your limit.
- Report anything wrong right away.
5. Applying for Too Many Cards
Why it’s not smart: Too many new cards can hurt your credit score. It can also lead to more debt.
What to do instead:
- Only apply when it makes sense. Maybe for rewards or a better interest rate.
- Wait between applications.
- Focus on using your current cards the right way.
How to Use Credit Cards the Smart Way
You don’t need to stop using credit cards. Just use them wisely. Here’s how:
- Track your spending so you know where your money goes.
- Always pay on time. It helps your credit score.
- Know your interest rate if you carry a balance.
- Use rewards only if you pay your card off in full.
Check your credit: AnnualCreditReport.com
One Step at a Time
Bad credit card habits can keep you broke. Good habits can help you build a better future. Start by changing one thing. Pay more than the minimum. Stick to your budget. Watch your statements.
Each step makes a difference. Look at how you use your credit cards. Make a plan. Take control of your money.
