You may read this title, and think, “What hidden dangers could be associated with paying down my credit card debt? Becoming debt free is a good thing, right?” That is a true statement. Becoming debt free is an awesome thing, but there is something that you need to be aware of: reoccurring payments. Many people set up reoccurring payments to their credit cards to cover services like the gym, Netflix, Hulu, etc. That is ok, assuming that you pay these charges off every month. The danger arises when you pay off the card, stop using the card, but the reoccurring charges remain linked to your card.
I’ve actually learned this the hard way. Once I paid off my credit card, I moved the reoccurring charges to my debit card – so I thought. I called one of my service providers to cancel my subscription, but they ended up offering me a couple of months free if I gave them “one more chance.” Excited about the “free” offer I decided to take it. The only problem was that I forgot that I did that and never ended up calling back to cancel. I didn’t remember what happened until I received a notification from my bank telling me that my payment was late.
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