Americans lost an average $1,000 to financial errors last year — 3 major money mistakes to avoid paying the high cost of low financial literacy

Three specific financial mistakes accounted for the most errors. Here’s how each one slowly chips away at your wealth, and how you can spot a pattern before it becomes a problem.

Credit card convenience gets costly

Racking up credit card interest and fees is by far the most expensive financial mistake most Americans make, adding up to an eye-watering $130 billion nationwide as of 2022, according to the Consumer Financial Protection Bureau (CFPB). Nationwide, according to the Federal Reserve’s May report, credit card balances reached $1.25 trillion.

Also according to the Fed, the average interest rate on credit cards issued by commercial banks has reached nearly 21%, while new card offers are now averaging just under 24% according to LendingTree. At those levels, carrying a balance, even for a few months, can inflate the effective cost of purchases — especially for borrowers with lower credit scores, who tend to face the highest rates.

Paying on time each month, avoiding carrying a balance, and prioritizing balance paydowns of the highest-interest debt can help prevent interest charges from compounding further.

A balance transfer might be a way to get some breathing space on a debt that has been carried over month to month for a while: transferring your balance to a card offering an introductory 0% rate could buy you some time to pay down your balance.

Overdraft fees can hit hard

The NCLC estimates that consumers spent $12 billion on overdraft and non-sufficient funds (NSF) fees in 2025.

The simplest way to avoid overdraft fees is to regularly monitor your account balance and keep a buffer to cover upcoming transactions. Seeking a fee waiver sometimes meets with success, particularly as a courtesy on the first overdraft charge.