Credit card habits that increase debt levels

Certain credit card habits can significantly worsen debt due to the way interest compounds daily. According to a report from Accredited Debt Relief, common behaviors can derail efforts to achieve financial stability.

One high-cost habit is taking cash advances. These often involve upfront fees as high as 5% and high interest rates. Unlike standard credit card purchases, cash advances typically lack a grace period, meaning interest begins accruing immediately upon withdrawal.

Another problematic habit is paying only the minimum monthly balance. While making minimum payments helps maintain a credit score, it can prevent meaningful progress in reducing the total debt owed.