Do you have trouble making a simple change? A change could be anything from Rubens Waawkins’ famous quote that says “Two Percent is all anyone needs to buy a tank of gas” to using a credit card that has a transaction fee every month.

There are three common mistakes consumers make every day, some are minor and some are major. Lets not argue for or against the merits and demerits of either but rather how many people fall into these subtle traps every day.

Mistake #1 – Using Credit to Buy Little Things

This is what takes place everyday in America when you get ready to spend money with credit. Our telephone is a big computer. You know how to get the mute button on your phone? That’s another examples of a passive or intimate loan. Money you don’t have, you ask the bank. Yes! The banks know and do not require you to have. They make so much money on you and your bills that they do not care if you ever pay them off in full.

So you take up credit and agree to pay back about 10% of the credit amount at the start of your credit card account. Need a new pair of Ralph Conspiracy shirts? Not a problem, the credit card issuing company has those as well. Need a night out at the movies? Not a problem, they will let you go when you charged it. Why? Because they make a commission on those purchases also. Keep in mind, you did not actually pay for this item with the card. Your initial use of the card meant as a introduction, a lure, so they could charge you interest. Then it would be not their problem if you stopped paying for that thing with the card but still charged it to the card. They are the credit card company’s problem.

You saved some money on something you did not need. There is no reward for using a credit card except to have more bills than you can pay.

Mistake #2 – Using Credit to Buy Large Moves

If you go to a casino, there will be a slot machine. This machine is used for a one in a million chance. The odds of winning a slot machine are next to none. One in a million is a small percentage. A person who uses a credit card to buy these slot machines is playing a statistical dice. The casino knows they will get nothing for these purchases and that is the lesson here.

They will happily return the $5000creditlimit for the slot machine and charge you another $200 so they can keep $1500morewhere they have already lost this money.

If you break the cycle of using credit for these large purchases you will soon discover that the card companies refuse to break the cycle and charge each time. You will eventually stop playing these games and stop incurring debts but that is about the time they will step in and increase the limit again and start their cycle over again.

Mistake #3 – Using the Card Too Much

Have you ever looked at the statement from your bank in the last year or so? I do. It is a big book. It may even have charts in it. It nearly always has one line item. It has a name and a amount. It has all your transactions and all of the balances for every credit card account you have.

If you are not careful, there is a transition here to your e-mail box being full of mails. Why do they do this? If you have a history of not paying your credit card bills, there is a reason why they would freeze your account.

Here are two reasons.

First, the credit card company does not want to lose your business to someone who knows your account number. They would rather have a steady customer than one who pays his payments late.

Second, if your habit is to pay only the minimum balances, the credit card company will need to keep your account for a longer time.

Using your credit card account over the year would make it look as though you are not using your credit card. You will lose your creditability.

Mistake #4 – Making the Minimum Payments

When you multiply the amount that is owed by the minimum payments, the number you get is how much you pay. This is wrong. The amount you pay is simply what is owed. If you were to pay off the debt that is refinanced daily, the payment would be happening less and less.

This causes you to lose track of where you are. Let’s take an example, you have a $3000 thousand credit card debt with 12% average annual percentage rate (APR). If you pay it off and simply make the minimum payments, you would pay solely 11% or $1085.60 principal and interest.

That is your debt recalculated each individual month.