Killer #1. Making everyday purchases like food and gas. This is not a wise financial practice. Because of the interest accruing on your credit card balance, you’ll be paying off the debt well after these consumable goods are gone.
Fix It! Use a debit or pre-paid cash card. These afford you the convenience of being able to swipe and go without having to carry cash. Also, because debit and cash cards are linked directly to available funds and not credit, you only spend what you have.
Killer #2. Minimum payments on credit cards may seem like a good way to keep some cash in your pocket. However, a small difference in your monthly payments makes a big difference when it comes to the interest you accrue.
Fix it! By adding $15-$20.00 more (that’s just three gourmet coffee’s) you can save yourself thousands in interest. See for yourself by punching your own numbers into this credit card interest calculator.
Killer #3. Late payments have a larger impact on your credit score than you may think. Payment history makes up the overwhelming majority of the information used to calculate your credit score.
Fix it! Automate bill payments. If you’re uncomfortable with an automatic bank draft, schedule the payments yourself from your checking account. Just remember to allow sufficient time for the payment to be received on or BEFORE the due date.
Killer #4. What you don’t know can hurt you. Failing to monitor your own credit regularly can kill your credit score and ultimately cost you big in increased interest rates later.
Fix it! Access and review your own credit report at www. annualcreditreport.com at least once per year. If you’re not sure what to look for, get help from one of our credit professionals.
Killer #5. Maxing out credit cards is a surefire way to kill your credit utilization rate, which directly impacts your credit score.
Fix it! Start by knowing your credit limits for each account you hold. Leave an available balance of at least 30% of your entire credit limit.