7 Stupid Strategies for Credit Card Consumerism

Consumers in the United States are leading the charge in the worldwide explosion of credit card debt; the total debt of American citizens alone is drawing ever closer to the vaunted trillion dollar mark. It takes some exceptionally irresponsible behavior to accumulate such impressive statistics, but there are a number of tried and true methods that can help you add your own two cents (or ten thousand dollars) to this historic effort. Just follow these seven simple guidelines to credit card use and you will be well on your way to the new American Dream of being crushed under the weight of your self-imposed debt.

1. Max Out Your Credit Limit: Though it might seem like a fun game at first, attempting to reach your credit limit as fast as possible should not be your goal. Don’t view the ceiling set by your creditor as a challenge that needs to be met. In fact, using over 30 percent of your spending limit will adversely affect your credit score, so it is best to avoid even sniffing distance of your limit.

2. Only Pay Your Minimum Monthly Balance: Interest on any remaining credit balance is compounded every month, so even if you pay the minimum on time every time, you are not managing your credit. Continue to pay the minimum each month and you may eventually pay off your debt, but you will end up paying two or three times more for your purchases than they are worth.

3. Don’t Pay Your Bills on Time: Many companies have harsh penalties, often twenty dollars or more, for being a day or even an hour late with your monthly payment. With online payment options that include automatic monthly withdrawals from your checking account, there is no excuse for incurring these exorbitant fees.

4. Pay Off Small Balances Before Big Ones: If you have more than one credit card (a dicey situation to begin with), you might be tempted to pay off the smaller balances before the larger ones. Though it might make you feel better to check a card off of your list, it rarely makes sense to pay off smaller debts first. Larger balances generate larger interest charges and associated fees, so make every effort to pay your biggest debt down first, even if it takes you a bit longer.

5. Use Your Card for Cash Advances: Though this option might seem like a lifesaver in a crisis, borrowing cash from your credit card company can lead you down a steep path towards financial ruin. The excessive fees and high interest rates associated with cash advances are not subject to a grace period and can result in debts that become increasingly difficult to rectify.

6. Use Your Credit Card Like an ATM Card: Borrowing cash from your credit card company is bad enough; using an ATM machine to do so is exponentially worse. Fees from your credit card company will likely be even higher for this type of transaction and the financial institution that owns the ATM will tack on their inflated charges just for good measure.

7. Cancel a Well-Established Card: It is best to retain strategic credit accounts, which are generally those that you have held the longest. Canceling older credit cards will make your credit history appear younger than it actually is and hurt your credit rating. Hold on to your well-established accounts, even if you rarely use them.


Heather Johnson, a freelance business, finance and credit writer, as well as a regular contributor for BusinessCreditCards.com, a site for comparing small business credit cards. She welcomes questions, comments, and freelancing job inquiries at her email address heatherjohnson2323@gmail.com.

4 thoughts on “7 Stupid Strategies for Credit Card Consumerism

  1. I found your site on technorati and read a few of your other posts. Keep up the good work. I just added your RSS feed to my Google News Reader. Looking forward to reading more from you.

    Susan Kishner

  2. Have you ever heard of Credit Card Zappers? They are supposed to lower credit card debt by reversing any fee, like interest, late fees, overlimit, balance transfer, or whatever.

    Whatever fee a credit card charges, they say on their site they can remove it.

  3. Another suggestion:

    8) Keeping balances on high interest credit cards when you’ve lower interest cards you could move the balance on to.

    In the UK, it makes a lot of sense to shuffle your debt (subject to card limits) to put as much as possible on cheaper cards. Of course the card companies have got wise to this and introduced balance transfer fees, but if you’re paying 18% on one card and 7% on another, it’s still well worth it even if you have to pay a 2.5% transfer fee.

    Presume this is possible in the US?

  4. Great tips Heather, you present them in a very easy to understand way.

    If these strategies would be followed in a timely manner, then we reduce the risk of being in debt.

    Thanks Clint for sharing.

    Jeff Clair

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