- by C.C.
Becoming financially dependent on credit cards
Placing too much reliance on credit cards — a form of “revolving debt” — can cause serious problems for your financial health, including No. 1 above.
There are two reasons for that: You can’t always predict how much of your income will be eaten up by a credit card bill at the end of the month. And making the minimum payments on your debt is an easy way to rationalize that you’re getting out of debt. That can lead to higher interest, an inability to make payments, and damage to your credit.
How to avoid it: Don’t make excuses for yourself, and don’t procrastinate. Saying things like, “My credit card debt isn’t as bad as my brother-in-law’s” or “I’ll just make the minimum payment this month; next month I’ll pay my balance off” are really good ways to keep yourself in an ever-increasing cycle of debt.