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Common Credit Card Mistakes To Avoid

Credit card balance transferHey everyone, I’m Joshua Rodriguez and, tank you for coming to read my debut post here at Eyes On The Dollar. I’ve had quite a bit of experience helping consumers with credit card debt so, I figured, I would share some of the fruits of that experience today. Although, I’ve come to learn that everyone is very unique on a financial level. But, I’ve also noticed quite a pattern through many of them. The pattern was, financial hardships were being caused by simple and avoidable mistakes made when using credit cards. So, today, I’m going to tell you a bit about the most common credit card mistakes that you should be sure to avoid.

Mistake #1: Using Credit Cards For Cash Advances 

One of the biggest mistakes that I’ve seen a trend forming around is the use of credit cards for cash advances. Unfortunately, most of the people that did this didn’t realize that cash advance balances were charged a much higher interest rate. Another thing most of them didn’t know is that, as they payed minimum payments, those payments were being allocated to the balances at the lowest interest rate. So, the balances at the highest interest rate would sit and fester and build while new balances were being created to be paid off at a standard, lower rate first. After a few years of this trend, the higher interest rate balance would become the vast majority of the thousands of dollars in credit card debt that these consumers had.

There’s Always A Lesson To Be Learned

Well, there are a couple in this case. First off, never, ever, ever, ever use credit cards for cash advances. The simple fact is that the pricing for cash advance transactions is designed to keep you in debt and paying higher rates. Also, you should always pay more than your minimum payment but, this is even more important if you already have a cash balance because if you don’t pay more than your minimum payment, none of the money will ever go to pay your higher interest rate balances.

Mistake #2: Not Thinking About Balances As They Add Up 

Another trendy mistake seems to be one of the most easily avoidable. However, I can’t tell you how many times I’ve heard something like “I got the bill each month, paid it, I never thought about how much I had left to pay.”. If you’re not thinking about your debts, there is no way to prioritize them, create a plan to become debt free or even be sure that you are paying a competitive interest rate.

The Lesson 

Pay more attention to your debts. Before sliding your credit card, it’s best to think about if you can afford to pay your balance off completely, including new purchases within 3 months. Although, it’s best to pay your balance off every month! Also, if you have outstanding balances that are just impossible to pay off any time soon, keeping track of them will help you slow down the use of your cards and make a plan to pay them off!

Mistake #3: Being Married To A Lender 

I’ve talked to people who have had the same Capital One card with 22.99% interest rates, and as the balance grew, they never thought to use a new credit card with lower rates or transfer the entire balance to a 0% promotion in order to make a dent in the debt and pay the rest off at a lower rate. They liked the card and didn’t enjoy change. Because of that, higher than average interest rates and tough economic times led them into a spiral towards financial hardship.

What We Should All Take From This

Once every year or two, it’s best to take a look at your rate and fee structures on your credit card. Once you are sure you know what you’re paying, take a look at the balance transfer credit card market. See if there are any cards that can beat your current fee structure. If there are, call your lender and tell them that you found an offer that is a lower cost, but you don’t want to transfer because you like the card you have. Then, ask them if they would be willing to match the offer. You would be surprised at how many times the answer is “Yes”. If not, strongly consider transferring your current debts to a new card. However, this process is a bit dangerous, so before taking it on, please read my recent post about how to use balance transfer credit cards properly. It’s available here!

Thanks For Reading, I’d Love To Know What You Thought!
Again, thank you for taking the time to read my post. I’d love to answer any questions or concerns or even learn your take on the credit card and credit card debt topics. So, feel free to leave a comment. I promise, I’ll respond! Also, for more fun, financial tips, head over to my blog, CNA Finance.

Kim’s Comments: I’ve certainly been guilty of mistake #2! Getting out of credit card debt can be hard enough without having to pay more interest than necessary. By paying attention, we can make it easier to get out of debt.

Image: Freedigitalphotos.net/Nualpradid

About Kim Parr

Kim Parr is a private practice optometrist, freelance writer, and personal financial blogger. You can follow her journey to 20/20 financial vision at Eyes on the Dollar.


  1. Joshua nice post and I agree please avoid the cash advance on the credit card. The interest rates on those things can be a nightmare. If for some reason you did make sure you request to pay back the cash advance part first in your monthly payments and you can pay it off before you statement due date. Almost 23% for a card is crazy and the fact is most people don’t ask to see if it could be lowered.
    Thomas | Your Daily Finance recently posted..June Stats, Updates, Goals, and Future PlansMy Profile

  2. Hey Joshua, glad to see you posting on Kim’s blog. I’m definitely married to my Discover card! I love the cash back rewards. With that being said, I try to pay off the balance as quickly as possible so that it doesn’t build up over time. Some good tips in this post!
    DC @ Young Adult Money recently posted..Want to be Wealthy? Own SomethingMy Profile

  3. I can’t understand why people would ever get a cash advance on a credit card, what a terrible idea!
    Glen @ Monster Piggy Bank recently posted..The Best Penny Stocks I Have OwnedMy Profile

  4. Great post. I agree…avoid all of these things!!! I would never take a cash advance either…but they send me those checks in the mail all the time. I shred them.
    Holly@ClubThrifty recently posted..Forrest Fenn: An InterviewMy Profile

  5. Nice post Joshua! I think I made all of these mistakes back in my time. Thus why I was such a “good” customer. ?
    John S @ Frugal Rules recently posted..In the Blink of an EyeMy Profile

  6. A credit card can be a great tool, but only if used responsibly. These are all good examples of using them irresponsibly. I do think the balance transfer game is a dangerous one. While it’s obviously helpful to pay 0% interest rather than 20% or whatever, people can get in the habit of continually transferring rather than actually paying their debt down.
    Matt Becker recently posted..Stop Focusing on the Negatives. Start Enjoying Life.My Profile

  7. Ugh, we’ve definitely fallen prey to mistakes number 1 and 2. What a shame for our money situation. Never again, though! Great post, Joshua.
    Laurie @thefrugalfarmer recently posted..Good Reads for the Week Ending 7-5-13: Farm Work is Hard Work!My Profile

  8. Cash advances are terrible, but I know why they offer them because they are a big money maker. I never used one and never plan on it. #2 was my downfall when I was in credit card debt, but I don’t let that affect me anymore.
    Grayson @ Debt Roundup recently posted..Are You Hardwired To Make Bad Investment Decisions?My Profile

  9. These are all great tips. My wife and I just recently got a new travel rewards card that we’re excited to use. That being said, we always pay it off right away and make sure that we always have the money before spending it. Credit cards are really convenient and the rewards are nice, but they sure can get you into trouble if you’re not careful.
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  10. Great food for thought!

    I’m guilty of sliding the credit card before thinking about whether or not I can pay it off in one month. That’s something I’m changing.

    Thanks for the tips.
    Terry recently posted..“Turn Your Home into a Rental House” to be topic on “The Morning Blend”My Profile

  11. It’s those cash advances where I see people get into deep trouble. If they think they have a revolving bank machine at their disposal they fall into a debt hole because they can’t get out. IF you can’t afford to take cash out of the bank then you can’t afford cash advances UNLESS you KNOW you can pay it in full, don’t do it. Thanks for sharing Josh!
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  12. Cash advances are definitely dangerous, but so easy to do. Unfortunately, most people don’t even realize that they are being charged a higher interest rate on them either. Lots of great advice, Josh! Thanks for sharing. ?
    Shannon @ The Heavy Purse recently posted..How to Integrate Debt Conversations into Everyday ActivitiesMy Profile

  13. All those small purchases sure do add up quick, don’t they? $20 here, $30 there and before you know it you’ve got a $1000 balance. Definitely been guilty of that. These days I’m a lot more careful about my spending and I think about each “swipe”.
    KK @ Student Debt Survivor recently posted..How to Find Money for Surprise ExpensesMy Profile

  14. I have done the cash advance mistake without knowing it, a company charged me and didn’t say it would be like a cash advance (I paid them for an investment so I thought it was a purchase) and a month later I was the balance with interest… thankfully I read statements so it only lasted a month. I’ve done cash transfers at 0% too and if you don’t check the date the deals expires and they start charging you.
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  15. I have been guilty of #1 many times in the past. When you are young and need some quick cash getting a cash advance on your credit card is all to easy. Now that I am older and know better I would never do that again.
    zimmy@moneyandpotatoes.com recently posted..By: zimmy@moneyandpotatoes.comMy Profile

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