Credit card debt is becoming an increasingly heavy burden for American households, with the average cardholder now owing nearly $8,000 across their cards. What makes this situation even more challenging is that the rising cost of living has pushed many people to rely heavily on credit cards for everyday expenses, from groceries to gas to unexpected medical bills. And, they're doing so at a time when credit card interest rates are sitting at an average of nearly 22% — though rates are much higher for many borrowers. 

As a result, any credit card debt that might have been manageable a few years ago may now cost significantly more. And, what's particularly frustrating is that many people are unknowingly making their credit card debt worse with a few financial habits that seem harmless on the surface. These seemingly innocent missteps can add years to your debt repayment timeline and cost you thousands of extra dollars in interest, so it's important to avoid them if you can.

Understanding these common mistakes isn't just about saving money on your credit card debt, though. It's about preventing your debt from spiraling out of control. So what are the common but costly credit card debt mistakes people are making right now? Below, we'll examine five to avoid.

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5 mistakes that could increase the cost of your credit card debt now

Let's explore the most costly mistakes people make with their credit card debt and what you can do to avoid them.

Making only minimum payments

Falling into the minimum payment trap is one of the most expensive mistakes you can make in terms of your credit card debt. While paying the minimum keeps you in good standing with your card issuer, it barely makes a dent in your actual balance, especially in today's high-rate landscape. After all, credit card companies design minimum payments to keep you in debt as long as possible, maximizing their profit from interest charges. 

For example, a $5,000 credit card balance with a 22% APR, paying only the minimum of $141.67 per month (which is 1% of the balance plus interest) would take over 23 years to pay off and cost you more than $8,500 in interest alone. But if you were to increase your monthly payment to $200, it would expedite the repayment process, allowing you to pay off your credit card debt in less than three years while saving thousands of dollars in interest charges.

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Ignoring promotional rates and their expiration dates

Many people take advantage of 0% APR promotional credit card offers without fully understanding the terms. When these promotional purchase periods end, though — often after 12 to 21 months — the interest rate can jump dramatically, in many cases to 25% or higher. Even worse, some cards apply the new rate retroactively to any charges that you made during the promotional period if you haven't paid off the balance in full. So, always mark your calendar with the promotional rate expiration date and have a payoff plan in place before that deadline arrives.

Using credit cards for cash advances

Cash advances typically come with immediate fees of 3% to 5% of the amount withdrawn, and they generally carry higher interest rates than regular purchases. Unlike purchases, cash advances start accruing interest immediately, too. There's no grace period. That means a $1,000 cash advance could cost you $50 in fees upfront, plus interest charges that begin accumulating the moment you withdraw the money. This makes cash advances one of the most expensive ways to access credit, but many people rely on this type of borrowing anyway, driving up the cost of their credit card debt.

Closing old credit cards without considering the impact

When you close a credit card, you lose that available credit limit, which can increase your credit utilization ratio, which is the percentage of available credit you're using. High utilization can hurt your credit score, potentially leading to elevated interest rates on your remaining cards and future credit cards or loans. Closing old cards can also shorten your average account age, another factor that affects your credit score. Before closing any card, then, you may want to consider keeping it open with a small recurring charge to maintain your credit history.

Falling behind, even slightly, on payments

There has been an increase in late and delinquent payments recently as more cardholders find themselves, and their budgets, stretched thin. Late payments trigger immediate late fees, raising the cost of borrowing, but the real damage comes from penalty APRs that can reach 29.99% (or higher), which kick in when your payment is late by 60 days or more. These elevated rates often apply to your entire balance, not just new charges, and can remain in effect for at least six months of on-time payments. A single late payment can also damage your credit score, making it harder and more expensive to borrow money in the future.

The bottom line

Even simple credit card debt mistakes can be incredibly costly, especially in today's high-interest environment. But by avoiding these common pitfalls and taking proactive steps to manage your debt, you can save thousands of dollars and get back on solid financial ground. So, make sure to take the time to assess your credit habits and resolve any issues that may be looming. And, you should do so quickly, before small problems become overwhelming financial crises.