1. Operating too close to your credit limitAre any of your credit cards maxed out or near their limits? If so, you're likely operating on the edge - financially and physically. "Not feeling in control of your financial destiny takes an emotional toll," says Eric Tyson, the author of "Personal Finance for Dummies." "When you don't have a handle on your finances, you experience increased stress and anxiety." Tyson's solution: cut back on your spending and credit card usage. Whether it's clothes, vacations or meals out, Tyson says if you can't afford something with cash, you can't afford it at all and should curb such spending. "Credit cards offer temptation for overspending and carrying debt from month to month," he notes. "If you absolutely must use credit, replace your credit card with a charge card. A charge card, like the American Express Card, requires you to pay your balance in full each billing period."
2. Using credit to bridge the gap between paychecksIf you don't have the resources to get by from week to week, and find yourself constantly whipping out a credit card to make ends meet, you're on shaky ground - and so is your credit.
To avoid this chronic problem, beef up your savings. "We should all have emergency cash funds," says Michael Rubin, CPA, a Certified Financial Planner and the author of "Beyond Paycheck to Paycheck" and "The Savings Solution."Rubin also suggests taking simple steps to maximize your savings, like trying an Internet bank for higher yields on your savings or participating in a 401(k) plan at work and getting a matching contribution from your employer. "These are things that really require no additional work," Rubin says.
3. Opening new lines of credit for the discounts and signup offersWhile it can be tempting to apply for new credit cards to score thousands of free airline miles or other credit card perks, it's also a strategy that's best used judiciously. Rewards cards typically carry slightly higher interest rates, and if you don't pay your balances in full each month their benefits are offset by additional finance charges. Even credit cards with "teaser" offers or very low rates should be sought sparingly. You don't want a slew of credit inquiries to lower your credit rating, or make it tempting to run up even more debt. "Resist the lure of zero-percent-down financing and credit cards that make too-good-to-be-true offers to get you to sign up," advises Tyson. Whether or not an offer seems too good to be true, it's always good to read beyond the marketing slogans to the terms and conditions to be sure you understand the offer.
4. Waiting until the last minute to send in paymentsIt's one thing to pay a bill at the eleventh hour because you were super busy or you simply forgot. But it's another matter entirely when you are juggling which bills to pay or you simply don't have the money to pay what you owe.
When you're scraping up money to pay bills at the last minute, realize that anything could happen to derail your plans. Something as simple, but as common, as a delayed mail delivery could lead to you being hit with a credit card late fee.