Seven Credit Card Mistakes Consumers Make

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The average American family has over $8,000 in credit card debt, according to a number of studies and reports.

Credit cards are offered by lenders because they make a fortune in interest and finance fees and unwary consumers fall right into the minimum payment trap, often taking years to repay their credit card debts.

In fact, the primary purpose of credit cards is to keep borrowers in debt and charging you extremely high interest rates!

But you can manage your credit cards wisely and avoid the age old consumer debt trap if you have the discipline to follow some best practices and know what pitfalls to avoid making.

Here are 7 credit card mistakes that many consumers make:

  1. Carrying a balance from one month to the next. Many people use credit cards because they don’t have the money to pay for whatever it is they’re buying on the card. When the statement comes, the majority of people rarely pay the entire balance off, and pay only the minimum payment. After all, why put it on a credit card if you have to pay for it all at once?! The interest and finance fees you pay when you carry a balance on a credit card are often more than the item is worth by the time you’ve finished paying for it.
  2. Sending your payment late, or forgetting to send it completely. People are genuinely busy, and it’s fairly easy to forget to get your payment in the mail before the due date. This happens to people who have several monthly payments to make each month, because it becomes difficult to keep track of what’s owed when and whether you’ve mailed a payment out to credit card A or credit card B. The interest and late fees you pay add up, especially if you make a habit of paying late. Additionally – your credit score will suffer.
  3. Applying to the first credit card offer you see, without doing any research. If you need to have a credit card, one of the worst things you can do is take the first card that comes along. You should be comparing interest rates, rewards programs, annual fees and finance charges of each card before making a decision. The first card offer you receive is rarely the best one you could get.
  4. Hitting the ATM for a cash advance. Unless your card comes with a 0% cash advance offer, withdrawing money from a credit card at an ATM costs you ridiculous interest and cash advance fees that are never worth the cash you take out.
  5. Having a wallet full of credit cards. What is the reason for having more than one or two nationally accepted credit cards? Even if you aren’t using them all, lenders will look at the amount of available credit you have and wonder what might happen if you decided to go on a shopping spree and max them all out! Keep one or two good credit cards available and stop applying for new ones. Consider closing accounts if you have too many.
  6. Sending your payment without so much as a glance at your statement. You receive a monthly credit card statement to pay your bill with, but you should also check over each of the transactions listed every month to be sure they are yours. Identity theft and fraudulent credit card use is common, and the best way to stop it is to notice it as soon as possible.
  7. Jumping on the promotional/introductory rate band wagon. Most credit cards entice new accounts by offering a six or twelve month introductory offer. It may be 0% interest on new purchases or on balance transfers, or it may be 0% on cash advances or checks. What many people forget when applying for these cards is to check what the rate will be once the promotion ends! Do you really want to be stuck with a 19% interest rate after twelve months?

Debbie Dragon is a writer for, where she writes about credit card offers, student credit cards and rewards programs.

March 7th, 2008 by Local Fresh


One Response to “Seven Credit Card Mistakes Consumers Make”

  1. Discover on March 18th, 2009 6:26 am

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