10 Mistakes You’re Probably Making With Your Credit Card


Chances are, you’re not using your credit card to the best of your ability. These common credit card mistakes should be avoided at all costs.
Credit cards can be a powerful tool when you use them responsibly. But if you’re not careful, they could cause problems.

At best, you could be missing out on some valuable benefits. But at worst, they could damage your financial health.

To help you use credit cards more wisely, here are 10 mistakes you should avoid.

1. Not paying your balance in full each month

You may have expected this to say “paying just the minimum amount due each month,” but you can do even better.

Paying off your balance in full each month prevents you from ever having to pay interest, which is the most significant danger that credit cards pose.


It can also help you avoid racking up a large balance, which can be hard to pay off. To make this work, it’s best to stick to a budget and avoid racking up a balance that’s larger than what’s in your checking account.

2. Paying your bill manually

If you’re relying on your memory to make your monthly payment, you’re bound to forget sometime. To avoid potential late fees and a potential ding to your credit, set your account on autopay.

You can typically do this in your online account or by calling your card issuer. Just be sure you have enough cash in your checking account on your payment date. If the balance is too low, you could end up with a returned payment fee from your credit card issuer or an overdraft fee from your bank.

3. Racking up a high balance

Maxing out your credit card balance is never ideal. But getting even close can be just as damaging, even if you’re paying your bill in full each month.

Your credit utilization, which you can calculate by dividing your credit card balance by your credit limit, plays a significant role in how your credit score is calculated. There’s no hard-and-fast rule for what your utilization rate should be, but the lower it is, the better.

Keep your utilization low by not using your card too much, or by making payments throughout the month to keep the balance relatively low.

4. Not knowing your card’s benefits

Some of the best credit cards are packed with perks, many of which you might not even know about. Certain credit cards, for instance, offer $600 worth of insurance coverage for your cell phone if you use your card to pay your phone bill (with a $25 deductible)

And if you’re a college student with the Discover it® Student Cash Back, you could get a $20 statement credit for each school year where your GPA is at least 3.0, for up to five years.

The more you know about your credit card, the more value you’ll get out of it. While some benefits are highlighted on the card issuer’s website and advertising, some perks are hidden in the fine print. Check your cardholder agreement and learn more about what your credit card can do for you.

5. Not maximizing your credit card rewards

If you have a rewards credit card, milk it for all it’s worth. If it offers bonus rewards on some spending categories, for instance, try to take advantage of those bonus rewards without overspending.

If you’re comfortable with using more than one credit card, you could even get more value out of your rewards. For example, you can use the Discover it® Cash Back solely for its five percent bonus categories, which rotate every quarter, ($1,500 max spend, activation required) and another credit card of choice together to give you even more perks and rewards…Read more>>



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