Use it for everything
In my opinion, you shouldn’t use your credit card for everything, you should only use it for certain purchases. The only way I would suggest using your credit card to pay for everything unless you have the money to pay the credit card off every month. A lot of people can’t afford to do it. If I were you, I’d only use my credit card to pay for small bills or purchases.
Not paying it off monthly
The next credit card mistake that people make is that they don’t pay it off each month. If you don’t pay it off monthly, you will be charged interest. Depending on how your credit is you may have a very high APR. A couple of years ago I was paying nearly $80 each month in interest on one of my credit cards. That’s one of the reasons why I said don’t use your credit card for every purchase. You may not be able to pay it off each month. I know I wasn’t able to. By paying your credit card off monthly, you will never see an $80 interest charge.
Using your limit
The next credit card mistake that people make is that they use their full credit limit. That’s a huge no-no. If you’re trying to have a good credit score, you shouldn’t max out your cards each month. You should only use 30% of your credit. Credit card usage also counts for 30% of your FICO score which is a lot.
Using your credit card over unsecured internet networks
Another mistake that people do is use their credit cards over unsecured internet networks. If the web network is not secure, you may want to think twice about using your credit card online at the time. Hackers can get your information and mess things up for you if you use an unsecured network. Once they get your credit card info, they can go on a shopping spree. Unfortunately, I have had this happen to me. I was able to get the money put back in my account, but it was a scary situation.
Not having a card with rewards
If you are going to have a credit card, you might as well have one that has some good rewards. I read about people getting free flights all the time because of their credit card rewards. When I start back using credit cards, I plan on getting one of those types of cards. Airline flights are not the only type of reward cards out there. There are also credit cards that allow you to get cash back and fuel rewards.
Using it more when you have a credit increase
The next mistake that some people make is that they start using their card more when they get a credit increase. Don’t fall into that trap. If you’re not careful, you can get into a lot of debt that way. I will never forget when my credit limit increased from $3000 to $4000. You would have thought I won the lottery. I used some of that “new credit” on some clothes and a flight. Man, was I stupid. Don’t do what I did and use your credit card because you can. Remember, you have to pay that money back.
Don’t read the fine print
The last mistake that some people make is that they don’t read the fine print. Some of the things that you must pay attention to are the amounts that you will be charged for cash advances and balance transfers. You also should know the APR before you make your first purchase.
Have you ever made any of these credit card mistakes?
Jason Butler
Jason Butler is an Atlanta native, as well as businessman, blogger and teacher. Not only is Jason a prolific flipper, marketer, writer and side hustler his number of years in higher education and student support have given him expert knowledge in understanding the economics of the student loan industry.
I’m in the same position as you – not using credit cards again until I’m debt free. But when I was using credit cards, the worst mistake I made was not knowing when my APR was going to increase. I had a credit card with 0% APR for the first year or so, so I didn’t worry about paying off the balance every month. Then one month I was suddenly getting charged a ton of interest! Luckily I was able to pay off the balance immediately, but I definitely wasted some money by not knowing the exact terms of my credit card.
I agree that if you can’t pay it off every month, it should be used VERY selectively (and probably shouldn’t be a rewards card then, since the interest rates are usually so much higher), but if you can – I think put every single purchase you can on it to get all the rewards points!
but if you do pay them off monthly, go for the big rewards/no cost cards. We live within our means; I have a wallet full of cards and spend no more (or less, I guess) than I would with cash; I just don’t like to carry cash. If (when) my cards are lost or stolen, I’m not responsible for the charges, if I lose cash–bye bye
Hi Jason!
I agree, if you can’t afford to pay it off each month, you should only be using it very seldom if at all. But if you have the discipline (and money of course) to pay it off every month, it’s a great benefit when you have a good rewards card. My wife and I put pretty much every purchase we can, even monthly reoccurring bills, on our Discover card. We take advantage of the rewards to cash in for gift cards, it’s been a nice way to help us save money while still getting out to eat here and there.
Joe-
Good point on not having one with a rewards programs..if you’re going to use a credit card, might as well get rewards!
I also don’t think people realize how quickly having multiple credit cards adds up. You sign up for the freebie or bonus, but then you have to “add” another credit card into your assortment. The more you have, the harder it is to keep track of all of them.
One thing I wish I would have done when paying off debt? Use cards with free balance transfers and 0% interest. I had great credit and could have easily done this.