Worst Ways to Use Your Credit Cards

Credit cards make it all too easy to make purchases that go beyond your budget. But that also makes it easy to fall into credit card debt. As a rule, you should only use a credit card to purchase what you can pay in cash before the end of the billing cycle. This is so you don’t continue to carry a balance from month to month that accrues interest. Which brings us to another of the most common credit card mistakes.

When you don’t pay the balance in full each month, you accrue interest on the remaining balance. On large balances this could add up really quickly and make it much harder for you to pay down your debt. In cases where large purchases are required, such as emergency home or car repairs, pay down the balance as quickly as possible. Don’t make the credit card mistake of just paying the minimum, or you’ll never get anywhere since most of the minimum contains only the interest.

On occasion, you might need a personal loan and credit cards make it easy for you to get borrow cash quickly. But the interest rate is typically much higher than a loan from a credit union or a lending company.

This is one of the bad credit card habits many people are guilty of. This happens often when stores offer their own store cards in exchange for a discount on purchases. Not only does this affect your credit score, but you wind up with balances on multiple cards.

These days almost every card offers some kind of reward, such as cash back or airline miles. Find a card that is going to give you rewards that benefit your habits, or you’re just missing out.

Rolling categories can be confusing sometimes, but if you aren’t taking advantage of them, you are using your credit cards wrong. You can reap big rewards or larger percentages of cash back by keeping track of rolling categories and making the applicable purchases. Just remember to only spend what you can afford to pay off before the next billing cycle.