Worst Credit Card Mistakes You Could Make

Since each person's financial needs are different, it makes sense that there are different types of credit cards. Before you apply for a credit card, become familiar with the various kinds of credit cards to make sure you're choosing the best credit card for you.The most common type of credit card allows you to have a revolving balance up to a certain credit limit. Credit is used up when you make a purchase and made available again once you've made a payment. A finance charge is applied to outstanding balances at the end of each month. Credit cards have a minimum payment that must be paid by a certain due date to avoid late-payment penalties.

If you have a credit card, you owe it to yourself to use it the right way. Making any of these credit card mistakes could cost money and precious credit score points.

1. Making minimum only payments.

Making the minimum payment on your credit card not only increases the amount of time it takes to pay off your credit card balance, it also increases the amount of interest you pay on your credit card. Increasing your credit card payment helps you pay off your balance sooner and at a lower cost.

2. Paying late.

Paying the minimum on your credit card not only increases the amount of time it takes to pay off your credit card balance, it also increases the amount of interest you pay on your credit card.
3. 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.

4. Ignoring your credit card billing statement.

If you don’t open your credit card billing statement, you risk missing your payment due date. You could also miss important announcements about changes to your credit card terms.
5. 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. The charge-off listing will remain on your credit report for seven years and could effect your ability to get credit cards and loans in the future.

6. Applying for too many credit cards at once.

Every time you apply for a new credit card, you knock points off your credit score. If you start applying 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. Apply for new credit cards one at a time on an as-needed basis.

7. 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 give you more control over your credit card costs. You know how you should and should not use your credit card based on how your creditor will respond to your actions.