Credit cards can be useful, but many people make costly mistakes. Here are the most common credit card mistakes and how to avoid them.
1. Only Paying the Minimum Balance
Paying only the minimum balance leads to high interest charges. Always aim to pay off your full balance.
2. Missing Payments
A late payment can lower your credit score and result in late fees. Set up automatic payments to avoid this.
3. Maxing Out Your Credit Cards
High credit utilization negatively affects your credit score. Keep your balance below 30% of your credit limit.
4. Applying for Too Many Cards at Once
Each new credit application results in a hard inquiry, which can temporarily lower your credit score.
5. Ignoring Your Credit Card Terms
Always read the fine print to understand interest rates, fees, and rewards.
Final Thoughts
Avoiding these common mistakes will help you maintain a healthy credit score and maximize the benefits of your credit cards.