Credit Card Mistakes

Hey WalletHubbers! Let's talk about common credit card mistakes and how to avoid them To be honest, people make a lot of different mistakes with credit cards, but there are six main mistakes to avoid

The first is not getting a credit card at all! Simply having an open credit card account lets you efficiently build credit history at a low, or no, cost Even if you don't trust yourself to spend responsibly, you can still benefit by getting a credit card and not using it at all You'll still help your credit that way That leads us to the second most common mistake credit card applicants make, which is choosing the wrong card The rule of thumb is to get a rewards card for everyday purchases you'll pay off in full at the end of each month

On the other hand, focus on low fees and interest rates if you're planning on carrying a balance The third mistake to avoid, and this is once you have a card, is spending more than you can afford Credit card debt is extremely expensive and the credit utilization, or the amount of your available credit, that you use is important to your credit score So we recommend only using about 30 to 40 percent of your total spending limit The fourth mistake is missing due dates

A past-due credit card is very bad for your credit square So we definitely recommend making a budget and setting up automatic monthly payments from a bank account for at least the minimum amount due But the fifth mistake is only paying the minimum when you can actually afford a lot more If you can pay your bill in full each month, you should do that to avoid interest It's a myth that credit card companies treat you better if you carry a balance from month to month

That is just not true! And finally, it's worth mentioning a mistake most people don't think of, which is applying for a credit card right before you apply for a mortgage or a car loan When you apply for a new credit card account your credit score will likely drop a bit for about six months And you don't want a lower credit score to result in a higher loan rate when you go to get one Now you know how to avoid the most common credit card mistakes But if you want to learn even more, click here and keep more of your money in your pockets and out of the credit card companies'! you