Millions Face Rising Credit Card Debt, Costly Payment Mistakes

Credit card debt continues to be a major financial challenge for many Americans, with the average cardholder owing nearly $8,000 and facing interest rates around 22%. A key costly mistake is carrying a balance and making only minimum payments, which primarily cover interest and can extend debt repayment over decades while accruing thousands in additional costs. Contrary to some myths, carrying a balance does not improve credit scores; in fact, paying off the full statement balance each month is best to avoid interest and demonstrate responsibility to lenders. Another common misconception is that closing old credit cards improves credit scores, but this often harms credit by reducing credit history length and increasing utilization ratios. Experts recommend keeping old cards open, using them occasionally, and managing payments strategically, such as paying before the due date to lower utilization. Additionally, consumers should guard against scams like phishing attempts from fake bank communications and use strong passwords and multi-factor authentication to protect their accounts.