New Delhi | Jagran Business Desk: A credit card is a great asset and a common means of cashless transaction in the growing digital economy. However, while using credit cards, it must be ensured that you don’t commit some of the common mistakes that others do. These mistakes can be costly and might even make you fall into a debt trap, which can be financially damaging because of the high-interest rates. Here are 5 common credit cards mistakes every user should avoid.
Carrying a balance month-to-month
One of the biggest credit score myths is that carrying a balance on your credit card improves your credit. In reality, carrying a balance month-to-month hurts your credit score and costs you money. If you carry a balance, you will have a higher credit utilization rate, which is the amount of debt you have as compared to your available credit.
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Only making minimum payments
While you should always make at least the minimum payments, it’s not advised to only pay the minimum due. Not paying your bill in full can lead you to fall into debt and unnecessary interest charges. Plus, just paying the minimum can add months or even years to the time it takes you to pay off debt.
Missing a payment
Late or missed payments can seriously hurt your credit score if you are more than 30 days past due. Thus, set up autopay to ensure payments are always made on time.
Neglecting to review your billing statement
It’s important to check that the transactions listed on your bill are accurate so you can take early action against fraudsters or reporting errors.
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Applying for new credit cards too often
Each time you apply for credit, a new inquiry appears on your credit report. The more inquiries in a short period, the greater risk you appear to lenders. Thus, try to only apply for credit as needed, ideally not more than once every six months.
