We are an independent, advertising-supported comparison service. Our goal is to help you make smarter financial decisions by providing you with interactive tools and financial calculators, publishing original and objective content, by enabling you to conduct research and compare information for free - so that you can make financial decisions with confidence.
Bankrate has partnerships with issuers including, but not limited to, American Express, Bank of America, Capital One, Chase, Citi and Discover.
How We Make Money.
The offers that appear on this site are from companies that compensate us. This compensation may impact how and where products appear on this site, including, for example, the order in which they may appear within the listing categories. But this compensation does not influence the information we publish, or the reviews that you see on this site. We do not include the universe of companies or financial offers that may be available to you.
At Bankrate we strive to help you make smarter financial decisions. While we adhere to strict
, this post may contain references to products from our partners. Here’s an explanation for
Bankrate follows a strict editorial policy, so you can trust that we’re putting your interests first. Our award-winning editors and reporters create honest and accurate content to help you make the right financial decisions.
We value your trust. Our mission is to provide readers with accurate and unbiased information, and we have editorial standards in place to ensure that happens. Our editors and reporters thoroughly fact-check editorial content to ensure the information you’re reading is accurate. We maintain a firewall between our advertisers and our editorial team. Our editorial team does not receive direct compensation from our advertisers.
Bankrate’s editorial team writes on behalf of YOU – the reader. Our goal is to give you the best advice to help you make smart personal finance decisions. We follow strict guidelines to ensure that our editorial content is not influenced by advertisers. Our editorial team receives no direct compensation from advertisers, and our content is thoroughly fact-checked to ensure accuracy. So, whether you’re reading an article or a review, you can trust that you’re getting credible and dependable information.
How We Make Money
You have money questions. Bankrate has answers. Our experts have been helping you master your money for over four decades. We continually strive to provide consumers with the expert advice and tools needed to succeed throughout life’s financial journey.
Bankrate follows a strict editorial policy, so you can trust that our content is honest and accurate. Our award-winning editors and reporters create honest and accurate content to help you make the right financial decisions. The content created by our editorial staff is objective, factual, and not influenced by our advertisers.
We’re transparent about how we are able to bring quality content, competitive rates, and useful tools to you by explaining how we make money.
Bankrate.com is an independent, advertising-supported publisher and comparison service. We are compensated in exchange for placement of sponsored products and, services, or by you clicking on certain links posted on our site. Therefore, this compensation may impact how, where and in what order products appear within listing categories. Other factors, such as our own proprietary website rules and whether a product is offered in your area or at your self-selected credit score range can also impact how and where products appear on this site. While we strive to provide a wide range offers, Bankrate does not include information about every financial or credit product or service.
Which bank should I choose?
Get personalized bank recommendations in 3 easy steps.
For many years, I have been helping readers get out of and avoid unwanted debt. I recently saw an unusual TV special about holiday excess. It featured a lively host going by the name of “Reverend Billy” from the “Church of Life After Shopping”. Billy calls our fascination with shopping the “Shopocalypse.” This has inspired me as I write this year’s top 10 list to share with you the top 10 sins that lead to debt.
For those of my readers who are committing any of these sins, I recommend that you repent and mend your ways as soon as possible.
Have a loan threesome
Co-signing on a loan for a friend makes a three-way transaction — you, your friend and the creditor — that often ends in disaster. Never co-sign a loan unless you are willing and can afford to pay the loan yourself. As a co-signer, you are equally responsible for the loan and should the other party default, you will be pursued like a long-lost lover to make good on the debt.
Many times you do not know that the original borrower is late on the payments until you find that your own credit is knocked up. Once the less-than-blessed event of a delinquency appears on your credit, the negative mark cannot be removed for seven years. If you co-sign, expect to pay.
Abuse your credit to live beyond your means
If you must buy groceries, gasoline or other essentials using credit because you have no money in your checking account, you need to take immediate action. To avoid debt, spend less than you earn. Unless you do, you will create an ever-increasing debt load that will one day come crashing down on you.
Overspend devilishly on luxuries and wants
Shopping as entertainment is dangerous. If you spend on credit and charge items that you cannot afford, such as a house full of furniture when you feel the temptation to redecorate, or a suite at the Bellagio in Las Vegas when you hear the dice calling, you are on a quick trip to overheated and unaffordable debt.
Splurge like there’s no tomorrow
Unless you believe in divine intervention, you need to know how your monthly income is spent. You must have a plan for spending. Otherwise, you let other people plan your spending. We all like to dine at a great restaurant. But how much can you afford to spend? Not having a plan is like letting the restaurant owner decide your order for you.
Skip building a savings “ark”
When it comes to rainy days, Noah found out the hard way. Likewise, without a savings cushion to fall back on, unexpected expenses invariably end up on a credit card. Better to save six to 12 months’ of living expenses in an emergency savings account. Then, when the car’s air conditioner breaks down, you have a major medical expense or some other event clouds your skies, you have rescue funds available to float you through.
Lie to your significant other about your spending
Not only is lying about your spending a bad idea for your relationship, it can wreak havoc on your finances. For example, your significant other may hope to buy a home or take a trip soon. Those plans could be canceled because of your secret debt. Minimize the damage. Fess up before you get exposed.
Deliver yourself into indentured student-hood
It’s not smart to take out huge student loans without knowing what career field you are going into or how much you’ll earn. Defaulting can end up costing thousands and thousands of dollars. Before you borrow, know how you’re going to pay it back. Also, be a sport and don’t ask your parents to co-sign. See Sin No. 1.
Drive upside down
Texting and driving is bad. Driving a car that’s worth less than the amount you owe is a close second. Your car depreciates immediately after you drive it off the lot. Without a big down payment, you will quickly become upside down on the car loan (owe more than the car is worth). So, if you buy a car and can’t afford an adequate down payment, or if the monthly payment is a stretch, any change in your financial situation could put you immediately upside down and in default.
Pray for better terms
Using credit wisely allows us to buy items that we would have trouble paying for with cash, such as our homes and cars. However, if you can’t qualify for a reasonable interest rate for a large item, don’t just pray for help. Fix whatever credit problems you have yourself. Then you won’t have to put your firstborn up for collateral.
Risk your home and retirement
The two most popular assets that people use for collateral to borrow against are their homes and their retirement accounts. Borrowing against these assets can put you in jeopardy. Do so only when necessary, and with a firm plan in place to pay the loan. Try to keep your mortgage loan to 80 percent or less of the home’s value. Don’t risk your retirement, because it will come whether you are ready for it or not.