3 ways you could be making your debt worse without realizing it

The average credit card user currently carries over $7,000 in credit card debt, which is a serious (and growing) issue, and with average credit card interest rates hovering near two-decade highs, that burden has become increasingly expensive to maintain. What’s particularly troubling, though, is that many people believe they’re managing their debt responsibly because they’re dutifully making payments each month and avoiding new major purchases. Still, their balances somehow seem to creep upward or stagnate despite their efforts.

What makes debt especially tricky is that you can actually make it worse without realizing it. The reality is that debt management in today’s high-rate environment requires more strategic thinking than simply “pay what you can when you can.” With borrowing rates still high, even seemingly innocent financial habits can quietly undermine your progress, which can happen in ways that aren’t immediately obvious. And, the difference between treading water and actually reducing your debt often comes down to recognizing these subtle but costly mistakes before they derail your financial goals entirely.

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3 ways you could be making your debt worse without realizing it

Even well-intentioned borrowers can fall into traps that make their debt situation progressively worse. Here are some of the most common ways people unknowingly sabotage their own progress:

Falling into the minimum payment trap

When money feels tight, it’s tempting to stick to just the minimum due on your credit card or loan each month. On the surface, it seems like a responsible choice because you’re avoiding late fees and keeping your account in good standing. But in reality, this approach can trap you in a cycle of long-term debt.

Take credit cards, for example. What many credit card users don’t realize is that the minimum payments on these accounts are calculated to benefit the lender, not the borrower. The majority of the minimum payment goes toward interest, with only a small portion touching the principal balance. And, as interest rates have climbed, this dynamic has become even more pronounced. 

The psychological comfort of meeting your “required” payment can create a false sense of progress, though. By making the minimum payment, you’re technically current on your account, but mathematically, you’re running on a treadmill. So, if you can afford to pay even a little extra each month, it can dramatically cut down both your payoff timeline and the total interest owed.

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Using buy now, pay later plans too freely

Buy now, pay later (BNPL) services have exploded in popularity, especially for everyday purchases like clothing, electronics, or even groceries. These platforms promise convenience and often advertise themselves as being interest-free, which makes them feel like a smart budgeting tool, especially when your budget is stretched thin. But what many borrowers don’t realize is how quickly multiple BNPL plans can pile up.

With several payment schedules running at once, let’s say $40 here and $80 there, your monthly obligations can balloon before you notice. And because BNPL loans are now starting to show up on credit reports, missing a payment could hurt your credit score and make future borrowing more expensive. A BNPL isn’t always a bad option, but if you treat it like free money, you risk creating hidden debt that sneaks up later.

Relying too much on balance transfers or new credit offers

When used strategically, balance transfer credit cards or promotional financing offers can buy you some breathing room. After all, many of these offers include 0% APR periods lasting a year or more, which allows you room to chip away at balances without interest piling up. The problem is, though, that many borrowers use these offers as a crutch instead of a tool.

If you move balances around without changing your spending habits, you run the risk of carrying debt indefinitely. Plus, once those promotional rates expire, your APR will typically jump to levels north of 20%, leaving you right back where you started (or worse). And don’t forget, balance transfers usually come with a fee of 3% to 5%, which adds costs that erode the benefits if you’re not careful.

The bottom line

Debt doesn’t always get worse because of major financial missteps. Sometimes, it’s the everyday habits, like paying the bare minimum, leaning too hard on BNPL or juggling balance transfers, that keep borrowers stuck. And, in today’s high-rate environment, these seemingly small decisions can have an outsized impact.

If you recognize yourself in any of these patterns, don’t panic. Awareness is the first step toward change. Start by paying more than the minimum when possible, treating BNPL as sparingly as you would a credit card and using promotional offers as part of a larger debt-reduction strategy, not as a way to delay the inevitable. By making these types of small shifts now, you can prevent what should be manageable debt from turning into a financial crisis.