3 Mistakes to Avoid While Paying Off Credit Card Debt

Don't fall victim to these pitfalls.

Credit card debt is bad news. For one thing, owing too much money on your credit cards could drive your credit utilization ratio into unfavorable territory, thereby hurting your credit score. It could also create a scenario where you rack up a ton of interest charges. That's pretty much the same thing as throwing your money away.

If you owe money on your credit cards, you may be eager to eliminate that debt as quickly as possible. But make sure to avoid these common traps along the way.

1. Juggling multiple credit card balances at once

It may be that you owe $500 on one credit card, $1,500 on a second credit card, and $2,000 on a third. If each of those credit cards has its own payment due date and interest rate, that can be a lot of information to keep track of. A better bet, therefore, may be to consolidate your debt via a balance transfer. That way, you'll only have one monthly payment to make, thereby reducing the likelihood of you missing a payment accidentally.

2. Missing out on the chance to snag 0% interest for a period of time

Many balance transfer offers come with a 0% introductory APR period. If you have good credit, it pays to see if you qualify for one of these cards. While you'll only enjoy 0% interest on your debt for a limited period of time (generally, 12 to 18 months), getting that reprieve could help you dig out of your hole much more quickly.

That said, if you move your balances over to a new card with a 0% introductory rate, you'll need to pay attention to when that period ends. And you should also avoid charging new expenses on that card as you work to pay your debt off.

3. Not understanding how you got into debt in the first place

There are different reasons why people end up with credit card debt. For some, it boils down to not tracking their spending carefully. For others, it's a matter of getting hit with unplanned bills. Think about the events and/or habits that led you into debt -- and take steps to address them while you're in the process of paying your credit cards off.

If losing track of your spending is what caused your debt, you can remedy that by setting up a budget that shows you exactly how much you can afford to spend in different expense categories. If you normally spend money carefully but got stuck with credit card debt because your car suddenly malfunctioned on you or you needed an emergency home repair, try boosting your emergency savings. That way, you'll have cash reserves to tap the next time an unplanned bill comes up, and you'll be less likely to need to fall back on a credit card.

Paying off credit card debt is an important step toward improving your general financial picture. Just do your best to avoid these credit card pitfalls as you work on becoming debt-free.