These are mistakes that we should definitely avoid and yet many people still do them. I have done mistakes #1-3.

1. Carry a balance: You can save money by transferring your balance over to a lower to no interest credit card while you try pay down your balance.
2. Making late payments: If you’ve been tucking away the bills as they come in, you may be in for a huge surprise. Many credit cards charge $39 for late fees and another$39 for being over the limit.
3. Making the minimum payment : Pay more than the minimum on the highest interest rates first and continue down your credit cards in descending order. When you pay off the first card, put all the debt payments from it into the second card and continue until you have paid off all your debts.
4. Charging things without cash in hand: People tend to spend more with credit cards than cash. Having cash on hand forces you to stick to a budget.
5. Not using your rewards card: Some people have yet to earn or redeem their rewards from their credit cards. It can be a wasted opportunity.

Too many credit cards?

How to Use Credit Cards

• Remember real money (yours) is involved. You have to pay this back and it will be with interest. Cash advances typically have a higher interest rate than standard purchases. I learned this the hard way. I feel so stupid knowing I spent YEARS paying off a card filled with stupid charges.
• Review your monthly statements. Identity theft is becoming more common and a good habit is to look at your statements every month. Sometimes credit card companies make mistakes on charges. I login to my credit card account every couple of days to see if anything suspicious happens. I need to work on checking my paper statements.
• Pay your bills on time. A good credit history can help when looking for a home as a higher credit score leads to lower interest rates. I had a bad habit of losing paperwork, so I automated all my bills. It saves on late fees and stamps. Many banks have online bill pay as a feature.
• If you can, pay the full amount owed. Credit card companies might call you a “deadbeat“, but at least you’re not tied to them each month. If you can’t, then pay as much as you can. Try a debt snow ball or evensnowflaking. Find money in your budget to eliminate your debt.
• NEVER, EVER lend your credit card to anyone! Even if it is a trusted family member or family. This account is tied to YOU and you will be held responsible.

Photo Credit: Andres Rueda

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