Many people feel that credit cards are the evil and that using this piece of plastic is like throwing your money away. They’re absolutely wrong and in this article I’m going to quickly show you what the top 6 most common mistakes are when it comes to credit cards and how you can avoid making these costly mistakes. Ready? Here they are:

1) People don’t read the fine print. Okay, so you have a credit card but it’s come with a lot of fine print on it. So what do you do? Well, the first thing to do is read the wording carefully. You can actually save yourself a lot of money by simply reading the back of the 0% APR card. What typically ends up happening is that the 0% introductory APR will not last all the way through the entire purchase term. This is where you will end up paying the higher interest (unless you find another card with a 0% interest for 6 months and then transfer your balance). So be careful with fine print and don’t be lazy.

2) People don’t go beyond their credit limit. Okay… Time to go beyond the fine print and pay attention. Make sure that you know how much of the balance you’ve spent on the card has been allocated to the principal. This is important because, if you go above about 30% of your limit, it will impact your credit score negatively. Also, if you go over 50% of your limit, it will have a negative affect on your lines of credit for years. This can be nasty so make sure you’re not blowing your family out of the water in the long run.

3) People don’t review their credit report. This is especially a huge mistake with credit cards. When it comes down to lenders looking at your credit report, they’re most concerned with how much money you owe, current issues, the number of times you’ve defaulted on your account and the time since your last delinquency. So, it’s important to understand how to fix your credit. I wouldn’t recommend just going to a website and signing up immediately. You need to pull your free credit report and review it with your loan officer and read out all the items that need to be addressed. By doing this, you will ensure repairs are made if any are needed and your credit score is brought up over time.

4) People don’t request a lower interest rate. Once you have a good relationship with a certain lender and have established a repayment history, request that interest rates and your APR be lowered. A lot of people by this time don’t have more credit card debt and then might avoid a higher rate from other lenders. Further, usually a year or two from now these same consumers will have much more spending power and will ask for their current lender to lower their rate when they have more leverage with the company. This is a simple tip but one that is missed by millions of people.

5) People give up on their credit card debt. Prior to they reaching a debt resolution plan, you see the real trouble. At this point, you either need to gain control of your spending or cut the cards. Either way, you keep your payments up, you stop accruing new debt and you keep your credit score intact. This is a vital step to saving your financial future. When you take it, you are only raising your credit score then spending money and getting into even more trouble.

6) People stop using their credit cards. Another bad move is when people go out of their normal spending routine and stop using their cards. If you’re one of these people, try to convince yourself that if you can build your credit this way, you are now freed from having a low credit score by having it go lower. Not only is this a dangerous assumption, it’s also untrue. Generally, people stop using their cards because they need to pay off their balances and spikes in interest. This may change if you get into a debt relief program, but you’re doing so because you go broke. You have to make a decision and you need to use your cards wisely. Along these same lines, when you are trying to rebuild your credit, be sure to keep your credit card accounts active. Keep your balances low and your payments up to date. An account in decent standing will help you increase your credit score. If you can avoid these six mistakes, you may have a great credit score or credit history going forward in your life. Remember, the key is now, not later. If you find yourself in trouble and have bad credit, don’t feel like you’re alone. There are many great credit repair and debt settlement companies out there that can help you get back on your feet.

Hopefully these tips will help. I’ve personally never had a credit card. My partner did because he wanted to fund a lot of his online projects. He found out that it takes common sense and responsibility to handle a credit card. Problems only arise when you begin living well beyond your means. I can imagine it is hard carrying a piece of plastic that has so much money attached to it and how tempting it is to splash out. Just know your limits and spend responsibly. Glenn always thinks I sound like a parent telling him this.