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Money Mistakes: Credit Card Debt

BOSTON (CBS) - Credit cards seems to be an area where many consumers make dumb money moves. It is so easy to misuse what's in your wallet.

There are times in everyone's financial lives when they may come up short one month and don't have the dollars to make a full payment on their credit card bill. The really dumb move is the individual who does it month after month and maxes out their credit cards and only pays the minimum each month.

Folks told me they thought they would be able to catch up and pay off the debt. But often times they found themselves in a deep hole. And they were suffering shoppers' remorse for having used their cards to buy stuff!

Credit cards are wonderful financial tools, tools that can improve our financial lives and make them easier. But carrying that debt month to month limits what you will be able to do in the future. If you find yourself in over your head with credit card debt you will need to evaluate your spending habits.

Put those credit cards in a drawer and try using only cash so you are aware of how much you are spending. And each month pay more than the minimum required on the credit card bill.

Getting out of debt and being able to pay off the credit card in full every month can save you thousands of dollars over time. Dollars you can use to meet your other goals.

And those late fees? Do whatever it takes to remind yourself to pay that bill on time. Not only do you pay that fee but it may trigger an increase in your interest rate. Taking a cash advance from your credit card company is going to be expensive. Rates start at about 20% and go up.

And don't even think about using the equity in your home to pay off the credit card debt. Not prudent! That could prove to be a really dumb move!


You can hear Dee Lee's expert financial advice on WBZ NewsRadio 1030 each weekday at 1:55 p.m. and 3:55 p.m.

Subscribe to Dee's Money Matters newsletter here.

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