Credit cards can be a powerful financial tool, or a costly financial mistake. In the right hands, credit cards can give you flexibility with purchases, improving your credit score, and earn points for special rewards. In the wrong hands, it can put you into debt, ruin your credit score, and drain your income.

The more you use a credit card, the more likely you’ll develop habits with them. Where you use a credit card, when you use it, and how you pay it off are all habits you develop with the card. Avoid or get rid of these bad credit card habits to make sure you are getting the most from your cards.

Not Paying Off Your Credit Card Every Month

A very dangerous game is to leave a balance on your credit card every month. The remaining balance gains interest, which for credit cards, is incredibly high. If not handled quickly, this practice can put you into large amounts of debt.

It might have started slowly, prioritizing other bills and expenses over your credit card, but this habit snowballs fast. If you are currently in the midst of putting off credit card debt, stop and fix it immediately. If you don’t have the money to pay it off, get the debt off the credit card by consolidating it. Take out a loan with a much lower interest rate, pay off the credit card debt, then focus on paying off your new loan.

Spending Money You Don’t Have

Credit cards are great because of the flexibility they provide, but if you push that flexibility too much, it’s likely to snap. When using a credit card, avoid spending money you don’t have in your bank account. You can’t predict the future, spending money you don’t have on hand is very risky. What if a surprise expense pops up and you are unable to pay off your credit card? You risk hurting your credit and going into debt.

Use your credit card to stay flexible with paying things off, but never use more than what you have in your savings. Don’t ever put yourself at risk for going into debt or be unable to pay off your credit card bill every month.

Ignoring Credit Card Statements

A valuable tool in tracking your spending and knowing what is due is your credit card statements. You might get them in the mail or email, but don’t throw them out with the junk mail. They can help keep you safe and on track with your credit card.

There are two major pieces of information on your credit card statements: how much you owe on the credit card and when your next payment is due. With these two pieces of information, you can ensure you don’t underpay or pay late, avoiding debt and unnecessary interest.

Everytime you get a credit card statement, you should take the time to study it. Even if you haven’t touched your credit card over the last month, open it up and see what it says. Often, there is information you need to see in your statement. It’s a great way to catch if your credit card has been stolen or used without your knowledge or receive information from the credit card company.

Another common mistake people make is forgetting they made a purchase right before they received their last statement. Likely, that purchase isn’t listed and they pay off the card, not using it again for the next month. The next statement comes and they don’t look at it, thinking it’s all paid off, when in reality there is a single charge on it. They miss that payment, credit score goes down, and now they have to pay off a missed payment with interest and likely a missed payment fee.

Opening Too Many Credit Cards

It feels like every company and store has their own credit card, with benefits, points, and rewards you should be using. Many retail stores will give you a big discount on a purchase if you sign up for their credit card, airlines let you earn points for a big trip with their card, and even online sites like PayPal let you make purchases online using their credit card.

Seeing all these benefits, it’s easy to think opening a new credit card is a great way to save money and get free stuff. Don’t let opening a new credit card become a habit though. You might find yourself in more trouble then the benefits are worth.

The first downside to opening too many credit cards is a big decrease in your credit score. If you open multiple credit cards all around the same time (like the holiday season), most credit bureaus view that as unfavorable behavior and will lower your score. The more you open, the lower your score will become. If you make a habit of opening credit cards regularly, your score will never be able to raise back up and either keep going down or be stuck where it is.

The other danger of opening multiple credit cards is keeping track of them all. If you are trying to reap the rewards of multiple cards, you need to track your purchases very closely, or risk missing important payments and overstretching your budget.

It’s best to do research on what credit cards are available and pick the ones that will benefit you the most. Don’t open a credit card for a ten percent discount or a free stuffed animal, get the most you can from the card you pick.

Paying for a Credit Card You Don’t Use

Some credit cards come with annual fees in exchange for great benefits. These cards can be very useful for reaching a specific goal, like getting a free flight, but what do you do after you are done with it? It’s easy to forget about the card in your wallet and move on, but those annual fees will come eventually.

If you have a credit card you don’t use, or don’t plan to use in the future, and it has an annual fee, cancel it! That’s just money you are spending for no good reason. You aren’t getting the extra benefits, so don’t pay for the card. If you want to have a credit card for emergencies or other reasons, open a free card instead.

Not Having a Credit Card

Not having a credit card is another habit many are proud of, but having a credit card is a good decision. Simply having a credit card, not using it, can help grow your credit score as an open line of credit.

Now, if you feel you can’t be responsible with a credit card, it is not a great choice to keep it in your wallet. Still get a credit card, but keep it someplace secure and harder to access, like a lockbox, a safe, or even with somebody else you trust. Then, when you want to use it occasionally, get it out, use it, and immediately pay it off.

If you are looking for your first, or a new main credit card, Pioneer has the one for you! Everytime you use it, you earn Rewards! points that can be redeemed for tons of different benefits. You can redeem your points for gift cards, appliances, experiences, flights and vacation packages.

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