Managing your money successfully can be difficult, including credit cards – credit only measures your debt but it is a part of life for most of us, and there are things you should be avoiding when it comes to your credit:

Spending More For Perks

Reward programs are very enticing – but with these perks and rewards you’re charged interest monthly. If you don’t pay off your credit card each month, you’ll end up paying much more money than what you bought with the card because of the compound interest. Remember when you buy something with your credit card, you are buying it with borrowed money. Don’t focus so much on the rewards you think you’ll earn that it causes you to spend more than you otherwise would.

Ignoring Your Credit Reports

Best practice: check your credit reports and credit score annually. You can check your credit reports for free at annualcreditreport.com once a year. There are three credit bureaus – and you should order your credit report from each bureau every year. You will have to pay to get your credit score, but it’s worth it. Your report will have all of your financial accounts (loans) listed on it, in addition to personal information. This is a great way to make sure everything is correct (i.e. that you’re not a victim of identity theft).


Paying Bank Fees

Avoid bank fees!  There are lots of options to bank without paying any fees. This goes for your traditional banking accounts, such as your checking and savings accounts, in addition to your credit cards.

Credit Score Obsessions

This one is most important.  Credit measures how well you pay off your debt – that’s it. While it’s important, focus on financial success in total, including getting out of debt and building wealth. Your credit is just one component of your financial life.  Be sure to learn the most about credit card best practices – such as never closing accounts, not accumulating too many credit cards, and awareness of early term fees.

Learn more about credit card best practices here.

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