Your credit history will have a huge impact on your life. A low credit score can prevent you from getting loans and other credit you may desperately need, and can even keep you from employment and housing opportunities. While all of these are certainly consequences you want to avoid, making certain credit mistakes could also cost you money on a daily basis. When this happens, it will keep you from saving money, paying down debts, and improving your credit score. Below are the seven biggest credit mistakes that are likely costing you money. Learn what they are so you can avoid them in the future and get back on track financially.
Making Late Payments
If you make late payments on a credit card or even a utility bill, it could remain on your Equifax credit report for as long as seven years. This means it may negatively affect your credit score for that long, even after you’ve paid off the full past due balance. Not only will late payments result in these consequences, but they’ll also cost you money. When you don’t pay your bills on time, creditors and other companies typically apply late payment fees to your total balance. This is in addition to any interest they will charge you for the past due amount, which will cost you even more money.
Paying Only the Minimum Amount on Your Credit Card Each Month
The higher your credit card balance is, the more interest you will pay, meaning the more money you will pay. Credit card companies actually hope that you will only pay the minimum amount due each month. When you do, they can charge you more interest on your total balance left on the card. However, if you pay more than just the minimum balance on your credit cards, you’ll pay less in interest and save more of your money.
Maxing Out Your Credit Card
When you carry a balance on your credit card, you pay interest on that entire balance. So then, it makes sense that if you max out your credit card, or spend to the absolute limit, you’re going to pay interest on that whole balance. Whatever portion you can’t pay off in one month, you’ll then be charged interest on that as well the following month, costing you even more money.
Not Understanding Introductory Rates
Many credit card companies offer great introductory rates to entice people into signing up for their card so they can make more money off those people, and the interest rates they are charged. People often rush to sign up for these cards because those introductory rates are so good. Unfortunately, many people also don’t look past those introductory rates to see what they’re going to be paying later on down the road.
Introductory rates are just that: they are rates that are only going to apply for a few months or so after you sign up for the card. Once they expire, the rate is going to be just as high, if not higher, than the average credit card. This is going to cost you money that you weren’t expecting to spend, push you further into debt, and negatively affect your credit score if you can’t pay that high interest rate.
Failing to Review Your Credit Card and Bank Statements Every Month
Too many people receive their credit card and bank statements every year and ignore them. This is a very big mistake. If you don’t regularly review your credit card statements, there could be charges on there that are not yours. Likewise, if you don’t regularly review your bank statement, you might not be receiving the interest you should on your savings account, or you may be paying too much in service charges. Banks and creditors send you these statements for a reason, so make sure you review them to look for additional money you shouldn’t be spending or other ways you’re spending money that you don’t have to.
Accepting a Loan Offer Without Shopping Around
If you need a car loan, mortgage, credit card, or any other type of credit, you want to shop around to ensure you’re getting the best deal. Unfortunately, too many people don’t do this, particularly if they feel that they desperately need a loan as soon as possible. However, this could cost you a great deal of money. If you don’t shop around, you may end up paying too much in interest and you could even lose out on certain bonuses that could help you, such as a great introductory rate or a points program that could also save you money in the end. Ultimately, you won’t know what you’re missing out on unless you shop around and see what different lenders have to offer.
Failing to Check Your Credit Reports Regularly
There’s no reason not to check your credit reports regularly. Credit reporting agencies, such as TransUnion, offer free credit reports at least once a year. If you don’t check them, you won’t know if they contain inaccurate information, such as showing a past due balance on a debt you’ve already paid in full. When this is the case, you’ll pay more in interest rates for any loan you apply for, which could cost you a great deal of money over time. It could also make it harder to pay down those high-interest loans, which will only add more interest and make it even harder for you to pay down those loans.
Struggling with Debt? Call Our Florida Debt Defense Attorneys
Unfortunately, too many people make these credit mistakes that cost them money and plunge them deeper into debt. If you’re struggling with debt, or even facing a lawsuit filed by a debt collector, it’s time to speak to a Fort Lauderdale debt defense attorney. At Loan Lawyers, we know there are defenses to these lawsuits and we’ll use them to give you the best chance of a successful outcome. Call us today at (954) 523-HELP (4357) or contact us online to schedule your free consultation with one of our attorneys.
Loan Lawyers has helped over 5,000 South Florida homeowners and consumers with their debt problems, we have saved over 2,000 homes from foreclosure, eliminated more than $100,000,000 in mortgage principal and consumer debt, and have recovered over $10,000,000 on behalf of our clients due to bank, loan servicer, and debt collector violations. Contact us for a free consultation and find out more about our money-back guarantee on credit card debt buyer lawsuits, and how we may be able to help you.