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5 Common Credit Mistakes and How You Can Avoid Them


In the current financial climate, many of us can say that we have had to turn to credit to help us maintain financial security.

Credit is great for helping us get by to the end of the month, but when we misuse it, it can have huge consequences and can leave us worse off than we were before.
The first thing we need to do in order to be able to manage our credit efficiently is too make sure that we are up to date with our knowledge of how much we have and how much our payments are; after this we then need to make sure that we stay away from these common mistakes.

Mistake 1: Not knowing our Interest Rates

This is a very common mistake that many of us make – I am just as guilty. By not knowing our interest rates we can never be entirely sure of where we stand with payments and we’re also unaware of the potential for saving any money.

Fees vary widely among loans and credit cards, and if you have multiple accounts it can be hard to maintain control over our accounts. The first thing to do is make sure that you are aware of what the interest rate will mean to the total amount you will pay back. For existing credit then check the rates that you are paying, if they are too high or your payments aren’t making much of an impact then consider researching transfers that are at a better rate for you. There are many options available for better interest rates, such as a citibank balance transfer card, or similar. Research into 0% balance transfer cards is the key here!

Mistake 2: Missing Payments

Missing payments is one of the most common mistakes that you can make when managing your credit. Missing or late payments will not only mean the you will potentially be paying back more than you borrowed in the future, but they will also damage your credit score which can take years to build back up.

If you are having trouble meeting your payments then don’t despair as there are a number of changes that you can make to help. Firstly, speak to your creditors and arrange a payment plan that will suit both of you. If you are missing payments because you forget what is due, then why not set up Direct Debit payments, this way the pressure is off!

Mistake 3: Raising Credit Card Limits

If you use your credit cards often, then it can be very tempting to raise our limits so we can spend more. There are also many occasions when your credit provider will simply raise your limits just because you are a good customer.

To make sure that you don’t spend what you can’t afford to pay back, ring your provider and ask them to keep the limit the same, this way you will be avoiding the temptation. The rule of thumb with credit cards: if you can’t afford to pay it back in full every month then your limit is too high! Negotiation is key here!

Mistake 4: Paying only the minimum

This is a mistake that I think we can all say we have made at some point, but it’s also a mistake that can see you getting caught into a spiralling debt trap. There are many online credit calculators out there that will tell you exactly how long it will take you to pay off your cards if you only ever pay the minimum, and this should really be your first step as you may get a bit of a shock.

When making your payments, the general consensus is that you should always pay the full amount, not only are you then not paying back masses of interest fees, but you are also going to build your credit score. However as we all know, this isn’t always a possibility. If you can’t make payments in full then look at your highest interest rate loans/cards and up these payments by as much as you can.

Mistake 5: Applying for multiple store cards

Now this is something that I’m sure we have all thought: I want that dress but I can’t afford it… and a magical discount is handed to us in the form of an application for a store card. Don’t get me wrong, store cards are a great way to build credit as long as you make the payments in full; but they are also a very easy way to get into debt, especially when the interest rates are higher than many other forms of credit!

If you have store cards, then make sure you pay them off every month, but if like me you are considering getting one then always remember what you can actually afford to spend.

We all make financial mistakes from time to time, but keeping them to a minimum and being aware of the above issues will help us live a happier and brighter financial future!





Jolene enjoys writing, sharing and connecting with other like-minded women online – it also gives her the perfect excuse to ignore Mount-Washmore until it threatens to bury her family in an avalanche of Skylander T-shirts and Frozen Pyjama pants. (No one ever knows where the matching top is!) Likes: Reading, cooking, sketching, dancing (preferably with a Sav Blanc in one hand), social media, and sitting down on a toilet seat that one of her children hasn’t dripped, splashed or sprayed on. Dislikes: Writing pretentious crap about herself in online bio’s and refereeing arguments amongst her offspring.

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