Think you’re already at risk of debt? That might be due to a few habits you might be practicing when you realize it or not. As many of us are guilty of some of these habits, the problem might occur when we continue to do it all the time and become daily habits. From overspending to building up late payments, you will set yourself on the road to debt.
Here are four habits that will put you at risk of debt.
Abuse of Balance Transfers
While it might sound like a good idea to transfer balances on cards with high-interest rates to low-interest rates, you must be aware of the charges on new cards and the limit on paying off the balance before the expiration. Those who start to use new credit cards will actually put themselves in debt without even paying the first balance.
Charging Credit Over the Use of Cash
Have you paid with a credit card rather than choosing to pay with cash instead? Small purchases will quickly add up, especially if you already have a high-standing balance on a credit card. Those balances will lead to interest and add more money to your outstanding balance.
Lack of Emergency Funds
Consider the unexpected expenses that are due to illness or accidents. Will you have an emergency fund to look to in such situations? If you don’t, you might have to borrow to pay for these issues and get an idea of just how much you spend every month. This will also allow you to save up and determine how you can prepare a full six months’ worth of expenses.
Failure in Keeping Track of Your Credit Report
When was the last time you checked your credit report? Have you checked to see if any identity thief is stealing your name? Be sure to know what is going on and fix any mistakes right in their tracks.
Do you follow any of these habits? Comment below and tell us what you think!