5 Credit Card Blunders Surprisingly Easy To Make

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Credit cards are one of the most user-friendly methods of building robust credit. However, they are also one of the most misused financial vehicles. According to Jessica Genord, Quizzle’s Public Relations Associate, “Credit cards can be the most useful tool in your financial toolbox – if you know how to use them.”

Genord continued, “However, if you abuse credit cards and don’t handle them with respect, they can easily get out of hand and land you in some serious financial trouble. It pays to pay attention and understand where many cardholders go wrong.”

Below are just five of the most common ways credit cards are mishandled. Understand why they are blunders and how to avoid them, and you will be on your way to a happier, healthier financial situation.

1. Misunderstanding The Function Of Credit.

Credit cards are vehicles of payment, not methods to buy things you can’t afford. Your credit report acts as a window into how you behave financially, and credit cards are arguably the easiest way to illustrate your ability to properly handle credit.

Not sure how to build your credit by using credit cards? Quizzle can help!

2. Paying the minimum.

Be very careful here. Look at your interest rate and the outstanding balance you owe. Many times, the minimum monthly payment won’t even cover the accrued interest. In other words, you are literally paying every month and your bill is getting larger, not smaller.

3. Paying late.

While making a late payment is better than no payment, paying on a bill – particularly one with interest rates – can be harmful. Particularly if your credit cards carry a late-penalty fee on top of the additional interest rate, you’ll be hit with a double whammy for missing that date.

4. Using more than your ideal threshold.

The 30% rule is a guideline to help credit card users maintain a healthy credit. To determine your ideal threshold, take your credit limit and multiply it by 0.3 – the resulting number is how much you should actually place on your card.

You’ll notice, it’s much lower than the credit limit — 30 percent of it to be exact. For instance, if you have a credit limit of $500, it is recommended to maintain a balance of no more than $150 on that card.

Financial advisors suggest following the 30% Rule for credit usage. Find out more here.

5. You carry too many cards.

While having multiple lines of credit is beneficial to your credit report, even having a single mishandled line can tarnish your overall reputation. Having one poorly handled card out of three, or having one poorly handled card out of ten—neither situation is ideal.

While the risks may be high for credit card holders, they are significantly reduced through financial literacy. Education and respect for the responsibility of correctly using credit can bolster your financial health. In the right hands, motivated by the right intentions, credit can build and rebuild financial security.

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By Quizzle. Helping You Make Better Financial Decisions.