Credit is an essential aspect of our financial lives, as it allows us to borrow money for various purposes. However, using credit card responsibly is important to avoid falling into debt and damaging your credit score. Here are five credit card mistakes you should never make:

1. Missing payments or paying late
Missing credit card payments or paying them late can significantly impact your credit score, as payment history is one of the most important factors determining your creditworthiness. Even a single missed payment can stay on your credit report for up to seven years and can lower your credit score.
To avoid missing payments, set up automatic payments or reminders for total amount due to ensure that you never miss a payment deadline.

2. Maxing out credit card
Maxing out your credit card can be tempting, especially if you have a high credit limit. However, using all of your available credit can have a negative impact on your credit score, as it increases your credit utilization ratio. Your credit utilization ratio is the amount of credit you are using compared to your total available credit, and it's an important factor that determines your credit score.
To maintain a healthy credit utilization ratio, aim to use no more than 30% of your available credit at any given time.

3. Closing old credit accounts
Closing old credit accounts can hurt your credit score, as it shortens the length of your credit history. Your credit history is a record of all the credit accounts you've had, and it's an important factor that determines your creditworthiness.
To maintain a long credit history, keep old credit accounts open, even if you're not using them. If you're concerned about the fees associated with an old credit account, consider negotiating with the lender for a life time free credit card.

4. Applying for too many credit accounts at once
Applying for multiple credit accounts at once can also harm your credit score, as it can be interpreted as a sign that you're experiencing financial difficulties or are in a risky financial position. Each time you apply for credit, it generates a hard inquiry on your credit report, which can lower your credit score.
To minimize the impact of hard inquiries, limit the number of credit applications you submit and only apply for credit when you really need it.

5. Ignoring errors on your credit report
Your credit report contains information about your credit history and is used by lenders to determine your creditworthiness. Reviewing your credit report regularly is important to ensure that all the information is accurate and up-to-date.
If you notice any errors on your credit report, such as incorrect account balances or missed payments that you didn't miss, dispute them immediately. Ignoring errors on your credit report can harm your credit score and make it more difficult for you to obtain credit in the future.
In conclusion, using credit card responsibly is essential to maintaining a healthy credit score and avoiding financial difficulties. Financial difficulties, how? By avoiding these credit mistakes, you can improve your creditworthiness. The more creditworthy you are, more likely you will be approved for better interest rates, which can save you significant money in the future. Credit card companies keep a detailed track of your credit usage, if it is good, you can negotiate for better deals and rewards. Many credit card users think that the company recovers the cost of rewards from them, which is not true. If you want to know who pays for the credit card rewards you can watch the below video. Until next time…