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Breaking These Bad Habits When Using Credit | New


Credit card use has increased across the country as Americans face higher prices in recent months. As more and more people turn to credit for everyday purchases, the risk of developing bad habits that can negatively impact their finances increases.

“Credit has become an increasingly necessary tool for participating in today’s financial world,” said Amy Maliga, financial educator at Take Charge America, a non-profit credit counseling and debt management agency. “That’s why it’s important for individuals to use credit responsibly so as not to derail their life and money goals.”

Maliga breaks down four bad habits to avoid when using credit:

  • Pay the minimum. It may be easier, but only paying the minimum payment on your credit card each month is a habit that will keep you in debt. It also causes you to pay a lot more interest than necessary. Instead, strive to pay off your balance in full each month to avoid finance charges.
  • The churning of credit. This is the process of opening multiple credit cards to collect new customer bonuses like miles and cash back. This practice can have potentially disastrous effects on your credit score and your ability to get new credit when you really need it. Opening several accounts in a row is often seen as a red flag. Also, the more credit cards you have, the greater the risk of missing payments. Instead, regularly use one or two major cards to build and maintain good credit.
  • Buy now pay later. No, BNPL is not a credit card in the traditional sense. But these popular services are a form of credit that comes with financial risks, including potential late fees, a temptation to spend more, and no consumer protection. Instead of using BNPL, only purchase items you can afford at the time of purchase.
  • Cash advances. One of the costliest credit card transactions, cash advances typically have the highest interest rate. In addition, without a grace period, interest begins to accrue immediately. There are also fees for each cash advance transaction. If you’re using credit cards to get money, stop immediately. Evaluate your expenses to find ways to free up extra cash so you don’t have to resort to expensive cash advances.

For people overwhelmed with credit card debt, you can find relief with nonprofit credit counseling. After going through a free online credit counseling session or by phone, receive a free action plan with personalized solutions to get you out of debt.

About Take Charge America, Inc.

Founded in 1987, Take Charge America, Inc. is a non-profit agency providing financial education and counseling services, including credit counseling, debt management, student loan counseling, housing advice and bankruptcy advice. He has helped over 2 million consumers nationwide manage their personal finances and debts. To learn more, visit or call (888) 822-9193.

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SOURCE: Take Charge America, Inc.

Copyright BusinessWire 2022.

PUBLISHED: 09/13/2022 12:01 PM / DISK: 09/13/2022 12:03 PM

Copyright BusinessWire 2022.