Simple mistakes that can make your credit card debt more expensive this fall

Costly errors could add thousands of dollars to your debt and trap you in a cycle that takes decades to escape. Tfilm/Getty Images

Credit card debt has become a growing financial strain for millions of households. According to the latest data from the Federal Reserve Bank of New York, Americans collectively owe more than $1.21 trillion on their credit cards, and the average credit card interest rate is hovering just below 22%. That means even a small misstep can make that debt balloon faster than expected for anyone who's carrying a balance.

Those aren't the only issues at hand, either. Inflation has also put the squeeze on household budgets, leaving many people with less breathing room to cover their rising monthly expenses. That means it's easier than usual to fall behind on your credit card repayment strategy — and harder to catch up once you do. And, the stress on your budget also means it's easier to make mistakes with your credit cards.

Even small mistakes can set off a chain reaction that leads to mounting balances. And with borrowing costs unlikely to ease soon, knowing what not to do is just as important as finding ways to pay off what you already owe.

Learn how the right strategy could make your debt more affordable now.

3 mistakes that will make your credit card debt more expensive this fall

If you're using credit cards right now, it pays to be intentional. Here are some of the big mistakes you'll want to sidestep this fall:

Paying your credit card bill late

Missing your due date doesn't just hurt your credit score. It also costs you money almost immediately. When you miss your payment date, most card issuers will charge a late fee of up to $35, even if you're just a few days late. The bigger issue is the interest, though. When your credit card payment is late, your grace period can vanish, and if that happens, interest accrues on new purchases right away.

If your payment is late by 60 days or more, it can trigger a penalty APR to be charged on your account. A penalty APR is typically significantly higher than your regular interest rate, and once you're paying a penalty rate on your card, it can have a big impact on the cost of your debt. 

For example, if your card's standard APR is 22% but your penalty rate climbs to 29.99%, you'll pay a lot more in finance charges until you meet the requirements for the penalty to be removed. That's money that could be going toward your balance instead of the bank.

Explore your debt relief options and start taking control of your finances today.

Allowing a balance to carry over from one month to the next

You may think it's manageable to carry a credit card balance over from one month to the next, especially if you're only short by a few hundred dollars each month. Carrying a card balance is one of the fastest ways to let debt spiral out of control, though, because unlike installment loans, credit card interest compounds daily. That means every day your balance remains unpaid, interest is added, and then you're charged interest on the interest. 

For example, let's say you have $5,000 on a card with a 22% APR and you only make the minimum payment each month. In this case, it could take decades to pay off that balance, and you'd end up paying thousands of dollars in interest charges alone. But even if you pay more than the minimum, interest will still accrue on the remaining amount if you don't fully pay off your statement balance.

Carrying a hefty amount of debt can also limit your financial flexibility. When your credit utilization ratio, which is the amount of credit you're using compared to your total available limit, climbs above 30%, your credit score can take a hit. A lower score can mean higher borrowing costs on future loans, making your debt even more expensive in the long run.

Not taking advantage of balance transfers, debt consolidation or other available strategies

Another costly credit card debt mistake you could be making is sticking with the status quo when you have options that could lower your costs. For example, many credit card companies offer 0% balance transfer promotions for 12 to 21 months, giving you a chance to make real progress on your balance without added interest. While there will typically be a small transfer fee tied to these promotions, the savings can be substantial if you're strategic about paying down your balance during the promotional period.

Or, if you have larger balances across multiple credit cards, a debt consolidation loan could simplify repayment and potentially lower your interest rate. Average personal loan rates are typically much lower than credit card APRs, so you could save money while making just one predictable payment each month. And, by rolling your card debt into a fixed-rate loan, you'll remove compound interest from the equation, too.

Other strategies include working with a credit counseling agency to create a debt management plan or negotiating directly with creditors for lower rates or settlements. Whatever route you take, though, the key is not to ignore the problem. Every month you delay exploring these solutions is a month in which your debt grows more expensive.

The bottom line

Credit card debt is already costly, but avoiding these mistakes can help you keep it from spiraling further. By staying proactive — making payments on time, paying down as much of your balance as you can and exploring debt relief options when needed — you'll not only save money but also regain a sense of control. With card rates unlikely to fall significantly anytime soon, those steps could make the difference between feeling stuck in debt and making steady progress toward financial freedom.