Probably the biggest debt mistake that people make is getting too many credit cards. Having more than two credit cards can dig you into debt faster than anything If you went through a company that offers cards to people with poor credit, then you are paying a higher interest rate for a much lower credit limit than people that have good credit. If you make a payment late, your interest rate goes up, sometimes as much as twice what you were originally paying.

And let us not forget those late and over limit fees. If you make this debt mistake, you could make the minimum payments for as long as it would take you to pay off a mortgage, and still not have touched the principle balance due.

Major purchases will sink you as well. If you have bad credit and need a car, you will pay more for it and pay a much higher interest rate. Many times you and up with a car didn’t want because many car dealers unload the cars that they can not sell to anyone else to the people with bad credit.

This debt trap will ensure that you end up paying a fortune for a car that you will be stuck with. You will end up paying twice its worth, and never be able to get out of that trap because it will never be worth what you owe. Trading it in for another car will just compound the problem as the amount you owe above what its worth will be added onto the end of the next loan and put you farther into debt.

These debt mistakes can cost you a fortune in the long run. The bottom line is that is costs a lot more to be broke than it does to have money. Remember, if you can not pay cash, you probably can’t afford it. Use credit cards for emergencies only and pay them in full and on time to avoid interest and fees. Build up good credit before the major purchases and stay within your budget and let your good credit save you money.

Related posts:

1. Best Ways to Get Out of Debt
2. How to Lower Your Interest Rate
3. Getting Debt Free Isn’t Easy
4. The Best Ways to Get Out of Debt
5. How Debt Consolidation Loans Work