Credit cards can make or break a financial situation, depending on how the cardholder uses them. If used in moderation and paid on time, credit cards can improve your credit score and supply you with numerous rewards. However, if used poorly, credit cards can make your life a living nightmare. Below are seven deadly credit mistakes you should look to avoid:
Gluttony: Bumping Up Against Your Credit Limit – Just because you’re awarded a $5,000 credit limit doesn’t mean you should max out your card. Getting that close to your credit limit only increases your chances of going into debt and receiving a bad credit score.
Pride: Not Checking Your Credit Score – Don’t assume you’re credit score is fine. Credit reports can easily contain errors that can cause a lot of problems in the future.
Lust: Applying for Too Much Credit – Applying for too many credit cards in a short time frame can negatively affect your credit score. Stick with just three or four cards that you know you can pay off on time.
Greed: Taking Out a Cash Advance – Getting a cash advance will cause you to be charged a significant amount of interest.
Envy: Applying for a Card That’s Out of Your League – Typically, cards that allow access to fancy airport lounges and free airfare come with high annual fees that are only worth it if you travel enough to justify the rewards. Cards with no annual fees can still offer great rewards.
Wrath: Closing All Your Credit Card Accounts – Instead of cutting up all your cards, leave at least one account open, just don’t use it. This way you won’t jeopardize the average of your credit report.
Sloth: Not Checking Your Monthly Credit Card Statement – Don’t get lazy and forget to check your monthly credit card statement. If you do, you may fall victim to fraudulent charges or even identity theft.
For more information on credit card mistakes, visit Yahoo Finance.