There are numerous actions that individuals perform on a regular basis that can result in the destruction of their financial stability. Although the consequences of these actions may not be noticeable at first, in time these actions will cost the individual a lot of money in various charges and fees. These actions can also damage a person’s credit score, causing a decrease that continues month after month. Changing or eliminating these actions from your daily life will lessen their effects on your financial stability and you will be more financially stable within a short time.
Many individuals forget about budgeting and do not track the money that is coming into the household and being paid out for expenses. This can result in an individual spending more than they intend to spend and leaves them with no money for saving. In some cases, overspending affects their ability to pay their bills, resulting in late charges and higher interest rates for accounts.
Various retail stores offer a discount on merchandise when you open up a credit card account with the store. This is good for individuals that do most of their shopping at the retailer offering the credit card, but most individuals open up credit card accounts simply for the discount on merchandise. Opening a new credit account decreases your credit score and the number of open accounts available to you may cause you to be denied credit in the future.
Countless individuals do not check their credit report because they don’t think that they can change the information contained in the report. Nearly 25% of credit reports available from the three major credit bureaus contain mistakes that cost consumers hundreds of dollars in increased interest payments and cause them to be denied credit. Experts recommend reviewing the credit report from each major credit reporting bureau annually to check for mistakes.
Years of easy access to credit caused many individuals to stop placing money into their savings accounts for emergencies. They believed that they could handle anything with the credit available on their credit cards. Unfortunately, any purchases that they place on their credit cards will have interest charges placed on them, making the total amount paid for the item much higher. Placing the amount on the credit card also means that you will not have that money available for any other emergencies until that balance has been paid off.