Suze Orman Says Avoid These 5 Mistakes if You Have Credit Card Debt

Because it's always better to learn from someone else's mistakes.

It's never easy to be in credit card debt. When you owe more on your credit cards than you can afford to pay off, it can make you feel financially vulnerable. That often leads to a whole host of negative emotions, such as stress, frustration, and even shame.

Finance personality Suze Orman knows what that's like. As she tells it, she used to have five-figures of credit card debt. To help people in that situation, she recently shared credit card debt mistakes to avoid on her blog. If you have credit card balances to deal with, Orman's advice on what to avoid could help.

1. No blame, no shame

You may be feeling bad about being in debt, but don't kick yourself while you're down. Lots of people don't learn much about how credit cards work growing up. Credit cards also make it easy to spend money, even money you don't have. There's a reason the average credit card debt was over $5,000 last year.

It's important to take your debt seriously. Make it a priority, learn about how to pay off credit card debt, and come up with a repayment plan that works for you. But try not to be too hard on yourself. This is a fixable issue, and if you work at it, you'll pay off what you owe.

2. No BNPL for wants

BNPL refers to buy now, pay later, and these apps let you pay off purchases in installments. They're practically everywhere, as many major retailers have partnered with a BNPL app, and they're popular with consumers. According to BNPL statistics, 50% of Americans had used these services as of 2022.

When you make a purchase with BNPL, you're taking on more debt. That's the last thing to do while you're already dealing with credit card debt.

3. Rely on debit, rather than credit

One of the hard parts about paying off credit card debt is the fact you can keep using your cards. Some people end up spinning their wheels because of this. The money you spend cuts into any progress you make with your payments.

Orman has some good advice here. She recommends only using your credit card for one or two recurring charges per month and setting up automatic payments. That way, you're still using your credit card and building credit. For everything else, use a debit card. You'll only be able to make a purchase if you have enough money for it in your checking account.

Although credit cards are the payment method with the most benefits, they aren't always the best option. When you have credit card debt, you're better off using a debit card for the majority of your spending. You'll avoid adding to your debt and incurring more interest charges, and you'll pay off your debt more quickly.

4. Pay more than the minimum due

Every time you get your credit card statement, it will have a minimum payment amount and a statement balance. As tempting as it might be to only pay the minimum, this is a huge mistake.

The minimum payment amount is a very small portion of what you owe -- often about 2%. If you make minimum payments, it will take you years to pay off your card. Over that time, you could incur hundreds to thousands of dollars in credit card interest.

Instead, pay as much as you can, every month. Once you've paid off your cards, aim to always pay the statement balance or current balance going forward. You'll avoid interest charges and never end up in credit card debt again.

5. Focus on needs versus wants

Orman recommends that every time you're about to spend money, first ask yourself if the purchase is a need or a want. Needs are essential, such as rent and groceries. Wants are things you can live without, such as going to the movies or grabbing drinks with friends.

This doesn't mean to never buy anything unless it's a need. However, you should have a limit to how much you spend on wants per month. While you're paying off credit card debt, it's also a good idea to keep this to a minimum. By limiting unnecessary expenses, you'll have more money to put toward your debt.

Having credit card debt is stressful, but it doesn't have to be a lifelong issue. You can pay it off if you're careful about how much you spend and put all your extra cash toward your balances.