Credit cards can be a great way to cover unexpected expenses or build up your credit. But if you’re not careful, they can also send you into debt, causing serious damage to your financial future.

1. Misunderstanding The Purpose of Credit Cards

Too many people believe that credit cards are free money. That couldn’t be further from the truth.

When you purchase an item with a credit card, you’ll have to pay the lender back — often with interest.

This goes hand in hand with our first tip. Because so many people fail to see their credit as a tangible thing, it’s so easy to overspend. After all, you’re not paying for your purchase, at least not upfront.

Only purchase what you need and what you can reasonably afford to pay back.

3. Ignoring Interest Rates

Interest rates can get people into trouble. Before opening a credit card, always consult the company’s fees and interest policies to avoid any nasty surprises.

Often, credit card companies offer promotional rates that promise lower interest rates. But if you read the fine print, you’ll notice that these rates may change over time.

Be careful and read reviews before applying.

4. Opening Multiple Cards at Once

The allure of using a credit card can be powerful. So powerful that you may choose to open up a second and third credit card to take advantage of company-specific rewards.

But the more cards you have, the more payments you’ll need to juggle.

5. Using Credit Cards to Pay Other Debts

It’s never a good idea to use your credit cards to cover other debts. Remember, a credit card isn’t free money. You’re simply transferring that debt, and now you’ll have to deal with interest.

6. Failing to Build Credit

Credit cards are a fantastic way to increase or improve your credit score. Better credit can make it easier to get loans in the future on major purchases such as homes and cars.

As tricky as managing credit cards can be, there are still enough advantages that it’s worth it.

7. Thinking Poor Credit is a Lost Cause

Along those lines, using a credit card can also help you repair poor credit.

Though you’ll almost certainly have a lower line of credit than someone with a better credit history, regular repayments can do wonders to repair and raise your credit score.

8. Not Checking Your Monthly Statements

There’s no way around it, debt can be scary. But that doesn’t mean you can ignore your repayments.

No matter how nervewracking it may be, check your statements on a regular basis.

9. Only Making Minimum Payments

Minimum payments will help you pay off debts — eventually. But in the meantime, you’re likely accruing tons of debt through unpaid interest.

Pay off as much as you reasonably can each month. You’ll be debt free in no time.

Many companies charge late fees. While they may be willing to waive these fees a time or two, don’t expect much leniency if you keep paying late.

Set reminders in your phone or computer to give you a heads-up on when your payment is due.

Avoid These Ten Worst Credit Card Mistakes For Healthier Credit And Less Debt

As long as you avoid these ten worst credit card mistakes, you should be golden. In fact, you’ve already made a great choice by reading this article and staying informed. So keep it up, you’ll be debt free in no time.

You can learn even more about having healthy credit by checking out our article on surprising things that can hurt your credit score.

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