1) Overspending Credit cards are great tools in building credit but if not used carefully, credit cards can also be a trap to uncontrolled spending. Since credit cards are easy to carry and easy to use, it’s also easy to lose control of one’s spending. Thus, self-discipline and a strong sense of responsibility must be practiced by all credit card holders.

2) Taking out cash Credit cards today can also be used as debit cards. Many credit card holders do not realize that each time they take out cash from their credit card, they are instantly charged with interest. If you need cash, don’t take it out from your credit card.

3) Paying only the minimum Submitting only the minimum payment from your balance is a very bad habit. As long as your balance is not paid in full, the balance is carried over for the next billing period and the interest accumulates.

4) Being late or missing payment Being late or missing your credit card payments leaves a card holder with more debts that he already has. Late penalty charges and high interest rates can badly hurt a person’s credit.

5) Not shredding credit card receipts Identity thieves look into trash bins in search of used credit card receipts. These thieves make use of any personal information they can get such as your bank account number so they can use it against you. Before throwing away credit card receipts or billing statements, make sure that they are completely shredded.

6) Not checking your credit card statement Some credit card holders overlook the importance of reviewing credit card bills for accuracy. You could be paying for charges you never make if you don’t make sure that your billing statement is correct.

7) Throwing away expired credit cards When you receive your new card, make sure that you properly dispose the old one. Cutting them in half isn’t enough, as identity thieves can still get details out of it. Instead, cut them into small pieces and do not throw them in just one garbage bin.

8) Applying for a very large credit A large credit gives you more privilege to spend big on your account. If your monthly income isn’t suffice to pay for such a large credit, it would be better to settle for a credit card with a lower credit limit.

9) Applying to different credit card companies at once Submitting too many credit card applications to different companies can be bad for your credit score. Apply only to a credit card company you’re seriously considering.

10) Maximizing your credit If you’re using your credit limit to the full, that’s a clear sign that you’re spending too much on your credit card. It is advised that a healthy spending should not go beyond 30% of your credit limit.

About the Author

Liz Roberts is a loan consultant with NewHorizon Finance and has been providing consumers and business owners with financing since 1989. For years she has written 1. Closing credit cards that you’ve had for a long time. How long you’ve had credit plays an important role in determining your credit standing. Creditors prefer borrowers who have a long record of credit history. Closing credit cards that you’ve had for a long time is a bad move since it will be like deleting a part of your credit history. If you think you own too many credit cards, consider which accounts to close and do not close the ones you’ve had for many years. If the problem is that your old credit cards come with high interest, you don’t have to use them on a regular basis. To prevent them from automatically closing, you may use them once every few months to buy an inexpensive item. This way, you can immediately pay the balance in full and avoid paying for interest.

2. Missing on your credit card payments. Your ability to pay and how responsible you are in paying your debts are all reflected in your credit report. Obviously, missed payments will put you in a bad light. Other creditors will deem you as a high-risk borrower and you will not have the privilege of obtaining better rates when you apply for loans.

3. Using your credit limit in full. If you are in the habit of frequently maxing out on your credit limit, you are putting you are badly damaging your credit reputation. Those who use their credit limit in full or exceed their allowable credit are regarded as high risk. Using up your credit is also a clear sign that you are spending more than what you can afford. Credit card holders must all be aware not to exceed 50% of their allowable credit.

4. Not regularly checking your credit report. Sadly, many consumers neglect the practice of checking their own credit report. However, being aware of your credit report is one way to protect your account from fraud, illegal charges and identity theft. It also helps you keep up with your due dates of payment to your different creditors. It is recommended to get a copy of your personal credit report at least once every six months.

5. Not understanding your rights as a consumer. The Fair Credit Reporting Act has established rules and regulations for all lenders to follow. Do not let a creditor take advantage of you. Know your rights as a borrower.

6. Not being aware of the three major credit bureaus. Most consumers do not know that the three major credit bureaus (Equifax, Experian, Transunion) work independently in creating credit reports. You may request a copy of your credit report from any of these bureaus and if you find some corrections, do not hesitate to inform the bureaus right away.

7. Not building credit. Not having any credit in your account is a mistake. Creditors are not the only ones who check on one’s credit history. Employers and landlords also use an individual’s credit history as a basis for accepting applications. Without a credit history and a credit score, you will be very limited in your dealings.

8. Owning too many credit cards. Contrary to what many believe, owning a lot of credit cards will not boost your credit score. It is how you handle your credit card a