Dumb Move No. 1: Carrying a credit card balance when you have money in the bank
Actually, we could have put the period after the word “balance” in the sentence above.
Credit cards are powerful tools and can give you some pretty nifty rewards, but it’s dumb, dumb, dumb to carry a balance. It’s even dumber to carry a balance when you have money in the bank.
Your savings account is making what, 0.1 percent interest? And your credit card interest rate is probably at least 10 to 20 percent, right? Mathematically, it makes no sense to leave that money languishing in your savings account. Of course, you don’t want to leave yourself without any emergency cushion, but you should think twice before joining the households that are carrying a credit card balance despite having plenty of cash to pay it off.