5 Things You Shouldn’t Do When Using or Applying For Credit Cards


Millions of more Americans have credit cards today than in 2012 and, although this is the case, many of them are using the cards in a way that keeps them out of recurring debt.

More than half (52 percent) of credit cardholders paid their bills off in full each month during 2015. According to a Financial Industry Regulator Authority survey, this is an 11 percent increase from 2009.

And, when it comes to credit card spending, there has been a vast improvement in consumer habits.

Foundation President Gerri Walsh said the trend appears to be moving in a positive direction, which is great news. However, he said, many Americans are still facing an excessive amount of debt.

There are five habits to keep in mind when a person plans on using a credit card.

Don’t Carry A Balance

While many Americans are paying off their credit cards each month, some still have a balance they carry over. According to the survey, 47 percent of people say they incur interest charges on their balances. However, since there are more people using plastic, this percentage may increase.

Don’t Just Pay The Minimum Due

The number of people who paid just the minimum amount dropped to 32 percent in 2015, down from 40 percent in 2009. People who carry about will pay more in interest if they pay just the minimum amount.

Don’t Make Late Payments

There amount of cardholders who’ve been assessed a late fee decreased to 14 percent in 2015. In 2016, late fees for first time missed payments was set to $27; subsequent late fees within six months was set to $37. A late payment also can hurt a person’s credit score, which makes it harder to take out loans in the future. And, the issuer could increase the interest rate for additional purchases.

Don’t Take Out Cash Advances

Not a lot of people will use a cash advance from their credit card, but it’s important to note that before anyone does, the interest rate is higher than typical transactions, and there is no grace period. Interest starts right away, and there is a transaction fee of around five percent.

Don’t Just Settle On One Offer

Many Americans don’t compare the different credit cards, which could cost them in high-interest payments and lack of benefits. Only 35 percent of cardholders have said they do research on various issuers before they apply for a credit card.

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