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Financial security is a big concern for many and people resort to numerous plans and do a lot of future oriented saving. However how things turn out is pretty unpredictable. If there is a loss of job or steady income then it can completely change all your plans. A mistake people often make is by applying for expensive credit cards thinking of it as a means to some extra emergency money. Credit cards are never free, never without a cost so if you are setting a so called no interest card for a rainy day, you will find yourself in big trouble.

People end up with bad credit soon enough when they find that they are paying out more in bills than they are earning. In such cases they resort to charging their expenses to credit cards. When you do this, you will find that the bills keep increasing as the amount to be paid out in addition to the charges you have incurred by using the credit card will be higher. The better you plan things out and the more you save, easier it will be for you. When you have got a bad report or a missed payment then it is immediately reported to the credit unions. The negative mark will stay on your report for a period of seven years. It is important that you take up credit cards that you can afford always. When you opt for high end cards with rewards you may find yourself struggling to pay the interests and balance each month.

Another mistake that leads to bad credit situations for many people is the fact that they fail to close the outstanding balance on the card. A credit card does not need to have an outstanding balance each month to improve credit history, on the contrary when you close it dutifully every month it helps more. With a high interest rate and annual fees if you neglect to close the outstanding amount and should you find yourself without a job in the middle, you will be in bad trouble. Make sure that you have a good credit history and clean up your records by paying your bills on time every month without fail.

Another error of judgment by most people is when they pay up, they tend to pay the least amount due each month. If you can afford to pay more than that then do so, it will help greatly in sorting out the credit card balances at the end of it. Also make sure when you have a bad credit situation, you start by paying off the card with the high interest rate. This will help you in bringing down the debt in a more systematic manner.

Additionally many people also resort to a debt consolidation to sort things out. If you opt for a debt consolidation for your credit cards then you will be paying a net amount that is lesser than what you pay individually towards closing the balances on each card.