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The 4 Biggest Credit Card Mistakes to Avoid in 2024

People often have strong opinions for or against credit cards. Your experience largely depends on how you use them. The best credit cards pack in lots of valuable benefits, to the point where savvy cardholders save hundreds or even thousands of dollars per year with them.

However, if you don't manage your credit cards well, they can cost you just as much. Coming out ahead isn't too difficult, but you'll need to avoid a few big credit card mistakes.

1. Spending more than you can afford

The No. 1 reason people get into trouble with credit cards is overspending. Credit cards make it easy to spend money you don't have. It's possible to get approved for high credit limits, especially if you have a good credit score. For example, some people have reported getting $10,000 credit limits on salaries of $30,000 to $40,000 per year.

No matter what your card's credit limit is, don't make purchases based on your spending power. Only make a purchase if you can afford to pay it back that same day with money in your bank account.

Resist the temptation to buy anything you can't afford. It doesn't matter if you'll have the money by the time your credit card bill is due, or if you'll be able to pay it off within a couple of months. When you start doing this, it's easy to get into the habit of overspending, and that leads to credit card debt.

2. Only making the minimum payment

You're required to make a minimum payment on your credit card every month, but the minimum isn't much. On balances of $1,000 or more, the minimum payment normally comes out to 1% or 2%.

Paying the minimum may be the cheapest short-term option, but there's a massive long-term cost. Let's say you have a $5,000 balance on a card with a 22% interest rate. If you only make minimum payments, it will take you over 23 years to pay off that balance. In that time, you'll pay $8,527 in credit card interest.

The best option is to pay your credit card's full balance every month. You won't be charged any interest on your purchases if you do this. If you currently have credit card debt, pay as much as you can toward it each month. You may not be able to pay it off all at once, but paying more than the minimum makes a big difference.

3. Using the wrong credit card

When you're building up your credit, card options can be limited. You may need to stick to secured credit cards that are open to applicants with any credit history.

But if you have good credit, you can likely qualify for lots of credit cards. If so, it's important to make sure you're using a quality card that matches your needs. Here are a few examples:

  • If you want to earn money back on your expenses, many cash back cards earn between 1% and 6% on purchases.
  • If you travel often, you could save on the cost of your trips with travel credit cards.
  • If you have credit card debt, you could refinance it at a 0% intro APR with a balance transfer credit card.

Using the wrong card may not seem like a huge issue, but it can cost you. Let's say you have credit card debt, and you're using a cash back credit card. Even if you earn 2% back on your purchases, you'll likely be paying 20% or more in interest.

You'd be much better off getting a balance transfer card. Then, you can transfer your credit card debt to it and pay it off at a 0% intro APR.

4. Missing payments

If you don't make your credit card payment on time, the card issuer can charge you a late fee. By law, the maximum fee amount on your first late payment is $30. For each additional late payment within the next six billing cycles, the maximum fee is $41.

Along with the financial cost, late payments can also hurt your credit score. Fortunately, they don't have an impact right away. Your payment must be at least 30 days late to count against your credit score. Once it's that far past due, your score could drop by over 100 points.

This type of fee is 100% avoidable. Set up a reminder for yourself, or set up auto-pay on your credit card. If you slip up, make the missed payment ASAP and contact your card issuer to ask if it will waive the late fee. Most credit card companies will waive your first late fee if you ask.

Credit cards can be a valuable financial tool. Now that you know which mistakes to avoid, you can get the most out of your cards.

Apply for an Old National credit card to start building your credit today!

This article was written by Lyle Daly from The Motley Fool and was legally licensed through the DiveMarketplace by Industry Dive. Please direct all licensing questions to

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