Are You Making One or More of These Credit Card Mistakes?

Do you have at least one credit card in your name? Do you use it often? Are you concerned that you may be making some mistakes?

When it comes to something as powerful as a credit card, making a mistake can cost you both time and money.

Fortunately, once you’re familiar with the most common credit card mistakes, you can implement a plan for keeping these out of your life.

So, with that in mind, let’s examine five mistakes that have plagued many people before you:

1. Making a Late Payment

It only takes one late payment to negatively impact your credit score, so you need to avoid this at all costs.

Even if you only pay the minimum amount due, it’s better than sending a late payment or no payment at all.

Tip: know when your payment is due and mark it on your calendar. You don’t want it to slip your mind for any reason.

2. Overlooking Bad Terms

Even if you have a high level of comfort with your credit card, it doesn’t mean you should continue to overlook terms and conditions that aren’t in your best interest.

Is your interest rate higher than average? Are you paying a large annual fee, despite the fact that you aren’t getting much in return?

You need to review the terms of your credit card once a year. This will give you a clear idea of whether or not you need to make a change.

3. Chasing Rewards

Are you excited about the ability to receive reward points for every dollar you spend? While this is a definite benefit of a rewards credit card, don’t get into the habit of spending just to accumulate points.

4. Carrying a Balance

It’s not always possible to pay your balance in full, but it’s something you should try to do every month.

When you carry a balance, you’re going to be hit with a finance charge. When you don’t, you never have to worry about your interest rate. It’s really that simple.

5. Overspending and Hoping for the Best

The biggest problem with a credit card is that you can spend money you don’t really have. This isn’t an issue with cash, because you only have so much to go around.

If you get into the habit of overspending, you’ll also get into the habit of not paying your balance in full. Conversely, you end up paying a finance charge.

Final Thoughts

Even with a solid grasp of your finances, it’s possible you could find yourself making one or more of these credit card mistakes.

Rather than let these bog you down in the future, implement a plan for immediately changing your ways.

Have you made any of these mistakes? How did you overcome them? Share your personal approach in the comment section below.