Common Credit Card Pitfalls To Avoid

A credit card is a powerful tool that should always be respected.  Though many Millennials seem to have some sort of primal fear of using “plastic,” credit cards are not that scary when the cardholder knows how to use them.  

The dos and don’ts of credit cards are not always common sense, but a little research goes a long way.  The internet plays host to any piece of information we seek, and there is plenty to learn.  Take a look at this brief summary explaining a few common credit card pitfalls we should all avoid.  

Understand credit card lingo

Before a person ever invests their time into applying for a credit card, they should make sure to understand the terms commonly used by credit companies.  It is also important to understand the difference between a secured and an unsecured credit card.  

A quick Google search will reveal a host of financial dictionaries containing the definition to any term that could possibly be used on a credit card application.  Do not skim over contracts and terms.  Contracts are legally binding, and credit companies do not play games.  Do the research.

Research and compare interest rates

Interest rates are a sneaky entity of credit financing.  Various credit agencies offer different rates, and the lowest is not always the best decision.  There are always hidden terms and conditions surrounding a low-interest rate.  It is also wise to beware of the zero interest rates.  No credit card runs with no interest.  There is always a catch.  

Too many credit cards

Just one credit card is typically fine for those who are just beginning in the fiscal community, but it is common for people to carry several.  The website,, stated earlier this year that the average cardholder has nine different credit card accounts.  

From department stores to specialized cards like gaming accounts, there is a credit card for everything.  Above all, it is crucial to understand that having several credit cards at once spreads credit thin, and it does not look the best on a person’s credit ratings.  

Contracts are legally binding

Before signing anything, read! For the love of all things great in life, read the contract before signing it.  Once the card’s agreement is signed, it is legally binding.  

Understand the card’s credit limit, the annual percentage rate, and the grace period on payments.  Fees are also a part of carrying a credit card.  Make sure they do not sneak up.  

Minimize revolving credit

Most people are fully aware of their option to pay only the minimum payment on their credit cards each month, but what they do not understand is just how much it costs to push off paying the full balance. 


Every time a payment is late, there is a fee.  When the payment is only the minimum amount, interest accrues on the remaining balance of the card.  It costs to revolve credit.