You May Not Realize You’re Making these Credit Card Mistakes

It used to be that credit cards would get a bad reputation, after all, they do allow you to go into debt if you’re not careful, but that is more user error than anything.  These days it could be argued that a credit card could actually be used for every purchase.  With the protection against fraud they offer instead of being tied to your bank account, not to mention the rewards you can receive by making the purchases you were going to make anyways, to fully capitalize on how credit cards can benefit, you should ensure you are not making mistakes in handling this responsibility.

Not Checking Credit Report

You never you can steal your information from your card or a breach in a retail store, so it’s a good idea to make sure that all accounts in your name are up to date an accurate, so reviewing your free credit report at least once a year will help, although the score will not be listed, but actually on your credit card statements your score will be viewable, so monthly you can watch to ensure the score continues to trend in the right direction in order to have the highest score to have access to the best interest rates on the market.

Missing Payments

A large portion of your credit score is made up of your payment history.  Although you will not get dinged on your credit report until you are at least thirty days late, you could still get hit with a late fee by even being a day late, not to mention a possible interest rate spike if you continue to carryover a balance each month and pay interest.  By scheduling your payments in advance, even automatic the same time every month, you can stay on top of never missing a payment.

Maxing Out Your Credit Limit

There really is no stopping you from continuing to charge, other than the credit limit, I suppose, so the responsibility really is in the hands of the users, and the higher you reach your credit limit, the lower your credit score will become.  Paying off your statement balance every month will not only sure you are affording what you are charging, but that you do not pay interest, which leaving a balance on there is a recipe for disaster and could send you in a debt freefall.

Closing Accounts with Zero Balance

Being in debt is a scary thing and if you have had a history of owing, once you finally rid yourself of this burden, it should be cause for celebration.  Hoping that you learn from your mistakes and not getting into debt again, you may want to close your account, but this could actually hurt your credit score if you have debt on other cards, which would then raise your credit utilization.  The best thing you could do would be to keep the account open but cut the card up, that way it’s a best of both worlds, keeping the account open but not using it.

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