Yikes! 4 Credit Card Mistakes You May Be Making

Could you be making common credit card mistakes and unknowingly Perhaps you’ve just acquired your first credit card and you want to have a squeaky clean record.

If you’re not careful, you could easily do more harm than good with your revolving line of credit. We want to help you make the most of your credit card usage, so we’re revealing the top four credit card mistakes you may be making.

You’re Keeping a High Balance

Many people find that they have much larger lines of credit available to them through their credit cards, and they buy more than they would if they had cash on hand. In doing so, they rack up debt that takes long periods of time to pay off.

A good rule of thumb is to only make purchases with the card that you can effectively pay in full each month. Another great practice is to keep your balance below 30% of the limit on your card. For example, if the limit on your credit card is $1,000, don’t maintain a balance on the card any higher than $300.

You’re Only Making the Minimum Monthly Payment

While you may be making your payments on time, you’re paying far more for the purchases you made with your card if you elect to only make the minimum monthly payment. The minimum payments do very little to chisel away at the debt you’ve accumulated on your credit card. In most cases, it only covers some of the interest on the balance, and will surely cause your credit card debt to balloon, if not tackled quickly.

You’re Missing Your Credit Card Payments or Paying Them Late

Did you know that your credit score has the potential to plummet 100 points from past due credit card payment of 30 days or more? Your missed payment will stay on your credit report for seven years. Because your payment history holds the highest weight when it comes to determining your credit score, it is essential to prioritize your credit card payments so that you make them on time, every time.

You’re Only Paying Attention to the Rewards Programs

It’s easy to get caught up in the rewards programs of credit cards and forget that the interest rates on the cards have the potential to outweigh the actual benefits of the rewards. Cashback bonuses and frequent flyer miles shouldn’t be the driving force behind your purchases.

If you’re driving up the balance in an effort to get perks, and then find yourself in the predicament of having to make minimum monthly payments, you’ll discover that the interest will eat away at the value of any rewards you’ve earned.

Get the most out of your credit card usage by studying your terms and conditions, and prioritizing on-time payments. Maintain a lower balance on your card that you feel you can pay off every month, and focus on steadily building your credit through a solid payment history. If you can avoid these top four mistakes, you’ll be on your way to