Nobody wants to fall into debt, but it happens all too easily — and quickly.

Some of the most common expenses that throw people into credit card debt are unexpected medical bills, emergency expenses and even just everyday spending, such as on groceries, that adds up.

But according to Beverly Anderson, president of global consumer solutions at Equifax (one of the three main credit bureaus), the top reasons people get into credit card debt are actually quite predictable since the majority of people who take it on make the following three mistakes.

Here are the most common traps to look out for so you can steer your finances toward long-term health:

1. You don’t have a budget

Not everyone loves the ‘B word,’ but since many Americans underestimate exactly how much they spend each month, budgeting can open your eyes on ways to easily save.

“A consumer should look at how much they’re making and what they’re spending,” Anderson says. “Knowing exactly where you stand and what you can afford may help you better manage financial commitments.”

You may be able to identify places where you can make some changes to your daily or monthly spending, whether it’s an expensive gym membership or your monthly grocery delivery. Can you work out outside or at home instead? Can you make time to go grocery shopping so you don’t have to pay for it to be done for you? Anderson suggests looking at how much you pay for these convenient purchases — and whether that “convenience” is actually helpful if it comes with costly debt.

In addition to trimming costs, it’s also important to allocate some money in your budget to a savings account to anticipate a major expense in the future. Experts recommend stashing three to six months of net income away for a rainy day so that when large purchases arise, they don’t wipe out your progress. 

2. You don’t pay what you can

Having a credit card means having the responsibility to pay your bill off in full every month so you don’t accrue additional expense in interest payments, which just prolongs your debt. 

For those who anticipate having trouble paying off their credit card bills, consider a balance transfer card with no fee so you don’t accrue interest on that debt. 

It’s important to note that many balance transfer cards typically require a good or excellent credit score to qualify, which is 670 or higher on the FICO scoring scale and 661 or higher on the VantageScore model. There are a few options for people with fair credit, but they may come with shorter no-interest periods.

If you’re having trouble making your minimum payments, don’t hesitate to talk to your lenders and creditors. Depending on your unique financial situation, this may mean making a call to see if they can negotiate your credit card rate and lower your interest.

And if you can pay some or the minimum payment on your credit card bill, know that any amount helps even if it’s not the full balance.

“When a consumer is not able to pay in full, they should pay whatever they can and avoid any late payment as that may not only hurt their credit standing but further increase the interest rate,” Anderson says.

3. You don’t keep a low debt-to-credit ratio

Your debt-to-credit ratio, also known as your credit utilization rate, is the ratio that shows how much of available credit you are using (your credit card balance) compared to the total amount you have available (your credit card limit). 

Credit utilization is important when you want to dig out of debt, since maxing out credit cards gives you very little flexibility when it comes to your cash flow. It also means you could be racking up interest charges almost faster than you pay your balance off, especially if you only make the minimum payment.

It also has implications for your credit score: Lenders and creditors generally prefer to see a credit utilization rate of under 30%, and it’s even better to shoot for the lowest percentage possible (less than 10%) to get the best credit score. A high credit score qualifies you for the lowest APR on credit products, which will ultimately get you out of debt faster.

Help keep your credit card balance low when financing debt or new purchases with a 0% APR credit card. The Citi Simplicity® Card offers a lengthy 0% intro APR for 21 months on balance transfers from the date of first transfer and 0% intro APR for 12 months on purchases from the date of account opening (after 19.24% – 29.99% variable APR; balance transfers must be completed within four months of account opening). There is an intro balance transfer fee of 3% of each transfer (minimum $5) completed within the first 4 months of account opening. After that, your fee will be 5% of each transfer (minimum $5).

Credited to|: https://www.cnbc.com/select/how-to-avoid-credit-card-debt/