Card Sharks: How to avoid credit card missteps

Credit cards, for those who have them and struggle mightily with them, can be summed up in one very simple word.

Evil.

The other end of the financial spectrum views credit cards for what they are: emergency funds or a line of credit that can be manipulated and used to get a higher credit score, when you know exactly how to navigate one.

That means opening a card, using it, and paying off the balance in full (or close to it) as soon as the bill comes. The other side of the coin is filled with a bevy on mistakes that, when made, are not only going to kill your credit score and ability to borrow money but make saving that much more difficult since you’ll be saddled with more bills to pay, some of which can cost in upward of a minimum payment.

The biggest mistake most make when it comes to credit cards is using them too often for the wrong reasons. Credit cards can be used to order something online when you don’t want to give your debit card out or if, again, you’re trying to build credit.

These cards were never designed to be used to charge vacations, for down payments on a vehicle, pay bills or buy groceries. If you can’t afford to hit the beach, you don’t go. If you can’t pay your bills or buy food with your money, then your budget needs reworked and thought through a few more times.

You also can’t be credit card happy and lapsing in the same breath. Opening too many credit cards or lines of credit at once only is going to serve to destroy your score and the overall picture painted by creditors of you when you apply for loans that matter, such as a home or car. The lapse part comes with your propensity for making payments past the due date. If there is one simple, commonly agreed upon principle of credit and credit cards that would be to always pay on time, even if it is just the minimum.

At the very least, the minimum payment shows that consistency and responsibility creditors absolutely need to see when they even consider you for a loan, and your credit score will reflect just how good or bad you are at being able to make payments on time.

Credit cards don’t always have to have such a bad wrap. They can be useful when the person behind the plastic card knows exactly the pitfalls and how to avoid them.