When it comes to using credit cards, it’s easy to make mistakes without even realizing it. Making just one of these mistakes can be very costly in the long run. Whether you’re a new cardholder or a seasoned veteran, avoiding these 10 common mistakes is essential for protecting your financial health and maintaining a good credit score. In this blog post, we’ll look at 10 costly credit card mistakes you must avoid in order to make the most of your credit card and stay out of debt.

1) Applying for too many credit cards

Many people think that having more credit cards gives them more financial freedom. However, this can be a costly mistake. Applying for multiple credit cards in a short amount of time can hurt your credit score and lead to higher interest rates. Additionally, you may find it difficult to manage multiple accounts with different payment due dates and interest rates. It’s best to stick to one or two cards to avoid these issues.

2) Not reading the terms and conditions

Reading the terms and conditions of your credit card is an essential part of being a responsible credit card user. Knowing the details of your credit card will help you avoid costly fees and mistakes. Be sure to read the fine print so that you are aware of any extra fees or other potential pitfalls associated with your card.

3) Not understanding interest rates

It’s important to be aware of the interest rates associated with any credit card you apply for. Understanding how much interest you’ll be charged on purchases, and any fees that may apply, can help you avoid costly mistakes and high payments in the future. Make sure to ask your issuer questions about interest rates and terms, and make sure you understand before you sign up.

4) Withdrawing cash from credit card

It is unwise to withdraw cash from a credit card as it can be expensive. Not only will you be charged an ATM fee, but you will also incur a cash advance fee and a higher interest rate than regular purchases. Additionally, cash advances don’t qualify for rewards, so you won’t benefit from using your card. Whenever possible, use other methods of getting cash, such as a debit card or checkbook.

5) Missing payments

Missing payments can lead to late fees and damage your credit score. Make sure to stay on top of payments by setting reminders in your calendar or using automatic payments. It’s also important to double-check that the payments you’ve made have gone through so that you won’t be charged with a late fee.

6) Making only the minimum payment

One of the biggest credit card mistakes is making only the minimum payment. Doing this can increase the amount of interest you pay, and it will take longer to pay off your balance. Try to pay more than the minimum whenever possible to reduce your debt quickly. This will also help improve your credit score.

7) Not checking your credit report

It’s important to regularly check your credit report for any discrepancies or errors. By doing so, you can ensure that your financial standing is accurate and up-to-date. Not doing so can lead to inaccurate information being reported and can negatively impact your credit score. Plus, it’s a good way to keep track of your spending and make sure you’re staying on top of all your payments.

8) Applying for a card with an annual fee

When considering a new credit card, it’s important to make sure you read the fine print and understand any additional fees you may incur. Many cards have annual fees, which can range from a few dollars to hundreds of dollars. It’s best to avoid any card with an annual fee unless you can be sure that you will make enough purchases to offset the cost of the fee.

9) Giving out your credit card number too freely

Never give out your credit card number to someone you don’t know or trust. Be careful when making online purchases and always use a secure website. Be aware of phishing emails and never click on suspicious links. Make sure you have the correct phone number and address for the merchant before giving out your information. If you’re ever unsure, contact the customer service department of your credit card company directly.

10) Not having an emergency fund

Having an emergency fund is an important part of budgeting and financial planning. Without it, you could be left without a safety net in the case of a financial emergency. It’s important to have at least three to six months’ worth of expenses saved up in order to cover any unexpected costs that may arise.