Boost Your Credit Score By Avoiding These Credit Card Mistakes
Credit card debt can be a huge burden, both financially and mentally. Not only do you have to worry about the interest rates and payments, but you also have to be careful not to make any mistakes that could damage your credit score.
Below, IVA Plan warn against common credit card mistakes and offer up solutions on how to avoid them. Through Debt Arrangements Schemes, everyday finance tips and free advice on solutions available, IVA Plan help hundreds start their journey towards becoming debt free.
If you’re looking to boost your credit score, make sure to avoid making these 10 common credit card mistakes.
1. Not Understanding How Credit Cards Work
If you don’t understand how credit cards work, you could end up making some costly mistakes. For example, you might not realize that making late payments can damage your credit score. Or you might think that carrying a balance will help your score when in reality it could hurt it.
2. Not Checking Your Statement
If you’re not careful, it’s easy to let debt spiral out of control. One way to stay on top of your finances is to check your credit card statement each month. This way, you can catch any errors and get them corrected right away. This is especially important if you see a charge for something you didn’t purchase. By keeping a close eye on your statement, you can avoid getting deeper into debt.
3. Making Late Payments
Paying your credit card bill late can damage your credit score and result in fees. To avoid this, make sure you pay at least the minimum payment by the due date.
4. Maxing Out Your Credit Card
When you max out your credit card, it can hurt your credit score. So it’s important to keep your balances low. A good rule of thumb is to use no more than 30% of your credit limit.
5. Not PAYING Your Balance in Full
If you don’t pay your credit card balance in full each month, you’ll be charged interest. And that can add up quickly. So make sure to pay off your balance in full every month to avoid paying interest.
6. Making Cash Advances
Cash advances are a quick way to get cash, but they’re also a quick way to rack up fees and interest charges. If you need cash, it’s best to withdraw it from your checking or savings account.
7. Applying for Too Many Cards
If you’re constantly applying for new credit cards, your credit score will suffer. That’s because each time you apply for a card, the lender will do a hard pull on your credit report. This hard inquiry will stay on your report for up to two years, and it can ding your score by a few points. So if you’re only applying for cards when you need them, you’ll be less likely to end up with debt that you can’t afford
8. Closing unused credit card accounts
It might seem like a good idea to close credit cards you don’t use, but it can actually hurt your credit score. That’s because it lowers your credit utilization ratio, which is the amount of credit you’re using compared to the amount of credit you have available.
9. Missing a Payment
Missing a credit card payment can have a major impact on your credit score. So it’s important to always make at least the minimum payment by the due date.
10.Ignoring Your Credit Score
Your credit score is important because it affects the interest rates you’ll pay on loans and credit cards. So it’s a good idea to check your score regularly and work on improving it.
By avoiding these common credit card mistakes, you can boost your credit score and save money.