Having a credit card account comes with plenty of responsibility, which is crazy to think that creditors try and lure you in right away at the age of eighteen with free goodies, and once you start using, increase your credit limit until you have virtually an endless amount of spending you can do. When it comes to credit cards, you do want to make sure you are financially responsible.
Not Using Cards Enough
That may actually sound strange hearing that you could be making a mistake by not using your credit cards, but in fact, the less you use them, the less it is helping your credit score. As it turns out, the more you use for purchases and pay off your full balance, the more credit will be available, and if you leave your card put away, the creditor could close your account, which could actually hurt your score, reducing your available credit.
Missing Due Dates
Now this should be common sense, and if it’s not, then you should never pay another bill late again. Not only will your score be virtually ruined if you are thirty days late and show up on your report, but even a day late can cost you a late payment fee, let alone even worse, boosting up your APR so that if you owe a balance going forward, you will have huge interest payments to make before you can chip away at the balance.
Only Paying the Minimum
Making only the minimum payment could hurt your credit score if you are near the ceiling of your credit availability, but more importantly unless you have a 0% APR promotion, paying only the minimum will hardly even cover the interest payment. That means that depending on the balance of your account, it could take decades to pay off the balance, so that just means that paying even a little over the minimum could reduce the payment plan by ten years!
Maxing out Available Credit
Hitting your available credit wall just puts you in financial turmoil. If you are charging up your account, that probably means you will not be able to pay off the full balance by the statement due date, at which you will carry over a balance and be charged interest, and depending how much you can pay at once, the balance will remain out there for years until you finally make a dent. On top of all of this, your credit score will significantly be reduced as it shows you may not be financially responsible.
Closing Accounts with Zero Balance
Sort of along the lines of sounding funny that it may hurt you by not using your cards, the same goes for closing an account. I certainly understand that you have worked hard to pay down your balance, probably taking years to finally pay it off, only to think you are doing yourself a favor by closing the account so you never get in that mess again. As it turns out, if you were to keep it open and just cut up the card and never use, you would be doing your credit score more of a service.