10 Debt-Reduction Mistakes

5. Trying to Please Everyone: When debt becomes such a problem that you can't afford to pay all the bills, some people start to pay certain bills and leave others unpaid. Then the next month, they pay the bills that weren't paid the month before and leave the previously paid bills unpaid. While the hope is that all the bills get paid on time, there are definitely some bills that are more important to pay than others. Switching around the bills in the hope that you can please all your creditors will end up displeasing them all and have a terrible effect on your credit. You need to list the bills in order of importance and make sure the most important bills are paid on time.

6. Bypassing Annual Checkups: In order to save money and reduce debt, some people begin to forgo regularly scheduled maintenance and checkups. The problem is that while this may save a bit of money now, it will likely result in much bigger bills down the road. Whether it is your car or your health, make sure to get checkups on a regular basis and at the first signs of trouble, not after it becomes an emergency.

7. Opening New Accounts for Better Rates: One way that some people try to reduce debt is to move balances from high-interest credit cards to lower-interest credit cards. While in theory this is a good move, it again assumes that you have solved the issues that got you in debt in the first place. If these reasons haven't been addressed, opening new accounts, even with the best intentions, will simply lead to more credit cards that are maxed out.