Don’t Make These Mistakes When You Have Debt
Posted on Tuesday, August 28th, 2018 at 7:00 am
Being in debt can be stressful. It can be hard to decide what to pay off first. Certain habits will make it harder for a person to pay off their debt. Make good choices! Don’t make these mistakes when you’re in debt.
Don’t Stop Paying the Debt
People who are in debt often feel overwhelmed by the amount of money they owe. It cannot be quickly and easily paid off, and this makes some people give up. They stop trying to pay off their debt and keep spending. This is a terrible idea because it makes the debt grow bigger. Instead, the best thing to do is to make a plan about how to pay off the debt. Get some help with this if necessary.
Don’t Pay Only the Minimum
Credit cards require people to pay at least the minimum balance every month. Failure to do that can result in penalty charges that will add to your debt. So, some people who are in debt pay the minimum and figure that’s good enough.
Unfortunately, the minimum is not enough. Paying the minimum is going to make the credit card company happy – but it won’t actually reduce your debt. The way to chip away at credit card debt is to pay more than the minimum.
Don’t Open Up New Credit Cards
It can be tempting to open up a new credit card account that has no debt on it. People who do this think it will help them to stop using the credit cards that have a lot of debt attached to them. What actually happens is the person now has one more minimum balance to pay every month.
Instead of opening new credit cards, it is better to try and control your spending. Choose a card to keep active, and put the rest away. Some people literally freeze their credit cards in their freezer. Be extra cautious about how much debt you add to the usable credit card. Remember to keep paying more than the minimum on all debts.
Don’t Borrow from Friends and Relatives
Often, a family member or close friend will offer to help a loved one to pay down their debt. Or, a person who is in debt might ask a loved one for a loan. This is not a long-term solution. It creates a brand new debt to pay off.
Eventually, the friend or relative will expect to get the money back. People tend to get grumpy when they are not paid back the money they loaned in a timely fashion. This situation can put a huge strain on a relationship.