10 Worst Credit Card Mistakes You Could Make

Full guidance About credit cards Uses

A credit card may seem like a way to make transactions, but that little plastic card can cause a lot of damage if you're not careful. Using your credit card the right way is key to staying out of debt and protecting your credit score. Making any of these credit card mistakes could cost you money and damage your credit.

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Making only minimum only payments

Credit card issuers make it easy to repay your balance by allowing minimum payments. However, making only the minimum payment on your credit card balance increases the amount of time it takes to pay off your credit card balance by increasing the amount of interest you pay on your credit card.

Paying late

Don't let your due date pass you by. Send your monthly payments on time. Come up with a system for remembering your due dates if you keep forgetting. Late fees can make it difficult to pay down your balance.

Loaning your credit card

When you loan your credit card to someone else, you have no control over the purchases they make. In the end, you're responsible for paying the bill, even if the person who borrowed your credit card doesn't. Never loan your credit card unless you're prepared to pay for all the purchases they make.

Ignoring your billing statement

If you don't open your credit card billing statement, you risk missing your payment due date or paying less than you should to remain current. Ignoring your credit card statement could cause you to miss important announcements about changes to your credit card terms.

Letting your credit card get charged-off

A charge-off is one of the worst things to happen to your credit report and your credit score. This is when your account has become delinquent to an extent that the lender will sell the debt to a collector for pennies on the dollar and write off the remaining balance as a loss.

Waiting to report your lost or stolen credit card

The longer it takes you to report a lost or stolen credit card, the longer the thief has to charge up your account. If you report your missing credit card before any fraudulent charges are made, you'll have no liability for the charges. Report a missing credit card as soon as possible to limit your liability for fraudulent charges.

Maxing out your credit card

Charging your credit card balance beyond 30% of your credit limit is dangerous to your credit score. Getting close to your credit limit puts you at risk for over-the-limit fees and penalty interest rate your credit card charges when you exceed your credit limit.

Closing your credit card out of anger

Canceling your credit card account will seldom get you anywhere with your credit card issuer. It will almost always cost you credit score points as you drive up your credit utilization.

Applying for too many credit cards at once

Each credit card application has the potential to knock points off your credit score. If you apply for several credit cards within a short period of time, you might notice the denials are more frequent as lenders start getting suspicious about the sudden onslaught of credit card applications.

Not knowing your credit card terms

Knowing how your credit card company handles late payments makes you more likely to pay your credit card bill on time. Knowing your credit card terms gives you more control over your credit card costs.