Credit card mistakes you should avoid

Credit card mistakes you should avoid

author: Emily

By Emily

If you’ve got your hands on a credit card, you might want to steer clear of these credit blunders.


Getting accepted for credit is tricky enough – but figuring out how to best use your card can be a bit of a minefield, too. Sit tight as we talk you through these credit card mistakes you’re better off avoiding…

Paying the minimum

Paying just the minimum amount each month can seem tempting. After all, it still counts towards your repayment, right?

Well actually, by only paying the minimum amount you’ll end up paying more interest, as it’ll take you much longer to pay off the balance.

Always paying the minimum amount may make it seem like you’re struggling to repay the amount you’ve borrowed. This could make you look like a risky applicant to future lenders – and it could give your credit score a knock, too.

Using all of your limit

You might have taken out a credit card for emergency costs that could occur or to cover typical expenses your income can’t stretch to each month. So, why would using all (or most) of your credit limit be such a bad thing?

Regularly reaching your maximum limit can make it seem like you’re depending on credit for essentials and can make you look like a bit of a risk to future lenders. However, if you pay on time and in full every month, this could have a positive impact on your credit score.

Credit reference agencies, like Equifax, typically recommend using less than half of your available credit limit for a healthy credit score.

Closing your account after a short period of time

Let’s say you’ve taken out a credit card to cover emergency expenses and it’s all paid off – now you’re wondering whether you even need a credit card anymore.

ClearScore suggest that closing your credit account after a short period of time could potentially harm your credit score. Long-standing accounts, such as your current account, could have a positive impact on your credit score, providing you don’t venture into your overdraft regularly.

Spending for the rewards

Some credit cards could entice you to spend more than you’d necessarily need in order to gain rewards for your spending, which could be tempting.

If you’re paying off your card in full every month, a reward credit card could be a good way to benefit, as this type of card comes with discounts or points as you spend – but if you’re struggling with your repayments, it’s important to check the terms and conditions of the reward scheme before using it and only spend what you can afford.

Not reading the T&Cs

Reading through the endless small print is never a fun way to spend your time… but it’s actually incredibly important when it comes to credit.

One of the biggest blunders when taking out credit is not checking for any hidden costs or fees once you’ve been accepted.  It may cost you if you were planning on using your card to withdraw cash or transfer money between accounts, for example.

So before you start spending on your card, it’s important to check the small print to see if you can afford any payments on top of what you plan to spend.

Missing a payment

So this one goes without saying… but we’ll say it anyway!

If you’re late with any payment, your credit score will likely drop and it’ll stick around on your report for up to 6 years. Whether it’s a mobile phone payment or a missed payment of thousands of pounds, it could make no difference when it comes to your credit score.

If you’re worried about missing payments, it may be a good idea to set up a Direct Debit or Standing Order, so you’ll have the peace of mind your payments will always be sent on time.

Wondering why your credit limit is a bit on the small side? Find out here.  

Disclaimer: All information and links are correct at the time of publishing.

author: Emily

By Emily

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Credit card mistakes you should avoid Credit card mistakes you should avoid