These 3 Common Credit Card Habits Are Keeping You in Debt

It's time to break that cycle.

If you're carrying a balance on one or more credit cards, you're in good company. As of the fourth quarter of 2022, U.S. credit card balances reached $930 billion, according to data from TransUnion. That's a massive jump from a year prior, when total U.S. credit card balances were at $785 billion.

One reason credit card debt may have soared in 2022 boils down to inflation. Living costs were elevated from the start of the year through the end of it. And many consumers had to turn to credit cards when their paychecks fell short and they didn't have a savings account to tap.

But the sad reality is that credit card debt is dangerous to your finances. First of all, the longer you hold it, the more it's apt to cost you in the form of interest charges. Also, having too much credit card debt relative to your total credit card limit could cause damage to your credit score. That means you might end up in a situation where you can't borrow money affordably the next time a financial emergency strikes.

If you're frustrated by the fact that you're still in debt, you should know that there are steps you can take to bust out of that cycle. But you'll need to break these dangerous habits first.

1. Only making your minimum payments

If you make your minimum monthly credit card payment, you'll be considered timely. So you may be inclined to just stick to those minimums and call it a day. But doing that will only cause your debt to drag out longer. Instead, cut some spending or pick up a side job so you're able to free up money to chip away at your total balance -- and not just simply satisfy those minimum monthly payment requirements.

2. Not transferring your balances to a card with a lower interest rate

It's possible to have credit card debt but still have a pretty good credit score. And if that's the case, it pays to look at a balance transfer. Many balance transfer offers come with a 0% introductory APR, which gives you a reprieve from racking up interest for a period of time while you work to pay your debt off. If you leave your balances where they are -- on cards charging a boatload of interest -- you might end up making the problem worse.

3. Applying for new credit cards while your debt lingers

When you're already struggling with credit card debt, the last thing you want is the opportunity to charge even more expenses on credit cards. So if that's the situation you're in, do try to refrain from applying for new credit cards (other than a balance transfer offer) until your balance is whittled down.

Credit card debt isn't an uncommon thing. But it's also not a pleasant thing. And in many cases, it can be devastatingly costly. So if you're eager to get out of debt, start making more than your minimum payments, look into lowering the interest rate on your balances, and steer clear of new credit cards, no matter how enticing the offers, until your circumstances improve.