Key takeaways

  • Using a credit card responsibly can build your creditworthiness, but making these mistakes this year could have a negative impact on your credit.
  • Paying in full and on time can save you from interest fees and hits to your credit score.
  • Overspending, earning the wrong type of rewards and not monitoring your transactions or credit score are a few mistakes to avoid.

In 2024, credit card mistakes are out and savvy credit use is in.

A credit card can be a powerful tool to have in your wallet — but only when it’s used responsibly. With a credit card, you can earn rewards and build your credit history as you spend. But it’s also possible to rack up interest fees and harm your creditworthiness.

“Issues with credit cards are very common, especially among younger and less informed consumers,” says Sean Salter, associate professor of finance at Middle Tennessee State University in Murfreesboro, Tennessee. “For younger consumers, many are tempted to elevate their lifestyle by using credit cards to make purchases that their income can’t support. Even older, more experienced consumers can fall into that trap. Credit cards are a financial tool, but it’s very difficult to maintain the discipline necessary to use them to your advantage.”

If you want to use credit cards to your advantage this year, you can start by developing good financial habits while also avoiding bad ones. Here are a few common credit card mistakes to avoid:

1. Not paying on time

Sometimes, schedules are busy and budgets are tight. But it’s best to always pay at least part of your credit card bill on time. Missing or late credit card payments can have a big impact on your credit score and fees.

Credit-scoring companies like FICO® and VantageScore® weigh your payment history as an important factor in your credit score. And payments that are more than 30 days late can show up on your credit report and stay there for seven years. Plus, once a payment is considered late, you may be charged a late fee as well as daily interest fees. Continued missed payments could even lead to the card issuer raising your card’s interest rate.

This year, set up automatic credit card payments to avoid missing your due date. And if you accidentally miss a payment, still pay the balance as soon as possible. You may be able to call the card issuer and ask them to waive the late fee.

2. Making only minimum payments

When you make the minimum payment on a credit card balance, it won’t ding your credit score as a late or missed payment. The minimum payment is usually a set dollar amount or percentage of the balance. But although it might be tempting to keep the rest of the unpaid balance money in your pocket instead of forking it all over, making only minimum payments isn’t an effective long-term strategy.

This year, use your hard-earned income to pay for everything you charge to a credit card. And if you can’t afford to pay more than the minimum amount, it may be time to look at your budget. There could be ways to cut down expenses or earn extra income so that you can pay for what you spend.

3. Carrying a balance

Nearly half of Americans carry a credit card balance from month to month, much of which can be attributed to emergency expenses like medical bills and repairs. But carrying a large balance can leave you sitting on hefty interest fees by the end of the year.

“The big issue here is that if you carry a balance, you transfer power to the credit card company. The carryover balance allows the company to charge interest on that balance — an interest rate that can be extremely high,” warns Salter. “To sidestep this mistake, your household budget should be the primary source of decision-making regarding how much money should be spent. If your budget won’t allow repayment within one month, the purchase should be avoided.”

This year, create a debt payoff plan that allows you to stop carrying a balance and start paying in full. This might require budgeting, starting a repayment method like the snowball or avalanche method or signing up for a balance transfer card.

If you need to make a large purchase in 2024, consider alternatives to using a credit card — like saving up for it, using a buy now, pay later (BNPL) option or applying for a personal loan.

4. Spending beyond your means

Using a credit card is different from paying with cash. You don’t feel the money leaving your wallet or bank account when you swipe. And repayment may seem far off — like future you’s problem. But are you spending more money than you make? Are you diverting any money to savings?

Inflation has become a pain point for everyday spenders, and some people may feel that even paying for necessities is unaffordable. But it’s worth identifying things you’re paying for that are wants, not needs. Everyone deserves to have a little fun, but the number of concerts, shopping sprees or vacations you partake in may depend on your income.

“To build credit and use your card responsibly, only make manageable purchases and have a budget or payment plan in place,” says Geri Hopkins, chief operations officer for Skyla Credit Union in Charlotte, North Carolina. “If you are already in credit card debt, you should use your card only in an emergency situation, create a budget that includes paying off your balance and consider a balance transfer – particularly onto a card that offers an extended period with 0 percent APR and no balance transfer fee so that you can consolidate and repay your debt more quickly.”

This year, get honest about what your means are and how to live within them.

5. Using the wrong card for your lifestyle

Not all credit cards are created equally, and various cards can serve different financial goals. If you’re still using a student card from your college days, you might not be earning the cash back on going out and groceries that you could be with the right card. If you’re a frequent low-budget traveler eyeing travel cards with high annual fees and luxury perks, there might be a more reasonable travel card for you.

“Make sure to think through your purchases and determine which card will earn you the most perks and assess the lowest interest rate for that purchase,” explains Hopkins.

Rewards cards can help you earn as you spend on purchases you’d be making anyway. This year, identify your biggest spending categories and your opportunities to cash in on rewards for them. You might be able to take your next trip at no cost or pay for a dinner date with rewards, depending on your lifestyle and spending habits.

6. Not monitoring transactions

If you’re not checking your credit card statement each month and monitoring your transactions, it’s time to start. A budgeting app can automatically track and categorize your transactions. That way, you can see how much you spend in certain categories and adjust as needed.

Monitoring your transactions can also help you spot recurring charges or subscriptions that you may no longer want. Plus, it’s important to watch for fraudulent charges or mistakes. This year, try to keep tabs on where your money goes, line by line, to take even more control over your finances.

7. Getting close to your credit limit

Your credit limit is the maximum amount available to spend on your credit card. And while it might seem like all of that money is yours to spend, it’s best to not use it up. The amount of your credit limit you spend versus what’s still available is called your credit utilization, and your credit utilization ratio can affect your credit score.

Experts recommend keeping your credit utilization below 30 percent. So if your credit limit is $10,000, try to keep your spending under $3,000 during a billing cycle or before you make a payment.

“If you go beyond your credit card limit, this can violate your credit card agreement and result in additional fees and penalties. It could also result in the lender freezing or canceling your credit card account, so avoid this at all costs,” says Hopkins. “If you want to increase your limit, request it from your credit card company. You’ll more likely receive an offer to increase your credit card limit automatically when you have demonstrated responsible card usage for a long time — meaning you’ve consistently made on-time payments or pay off your credit card balance in full regularly.”

To see how credit utilization impacts credit card approval rates, we looked at how Bankrate’s CardMatch users’ credit utilization ratios impacted their odds of receiving a new card. While it’s important to note that this data is not necessarily representative of what you might experience, we found that applicants utilizing less than 30 percent of their credit had a 91 percent card approval rate, compared to users using more than 30 percent with a 66 percent approval rate.

This year, try to spend well below our credit limit to improve your credit score (and your chances of being approved for future credit).

8. Applying for too many credit cards

Even if you’re eager to get a new credit card for the right reasons — like having access to more credit (which can lower your credit utilization) or earning better rewards — it’s a mistake to apply for a bunch of cards at once. That’s because each card application can trigger a hard inquiry on your credit, which impacts your credit score.

New credit makes up 10 percent of your FICO score and 5 percent of your VantageScore. And opening a new line of credit can decrease your average credit age, which is another credit-scoring factor.

“Opening too many credit cards can lead to multiple hard inquiries on your credit report, temporarily lowering your credit score. You should aim for no more than two to four inquiries annually across all loan types,” Hopkins continues. “Also, keeping unused credit cards open is advisable. This maintains a longer credit history and increases available credit — two factors that influence your credit score. Just always be sure to use your old cards periodically to keep them active, regardless of the transaction amount, and monitor them for potential fraud.”

This year, try using pre-approval tools to find the one card to apply for before triggering a hard inquiry. If you’re hoping to get more than one card, you may want to wait 90 days to six months between credit card applications.

9. Not discussing credit with family members

Nearly half of Americans married or living with a partner have kept a financial secret from their significant other (called “financial infidelity”). Even though talking about money can be tricky, it’s a worthwhile conversation — especially if expenses or debt are racking up in your relationship. Some people may want to keep their finances private. But talking about how much you and your partner want to spend, save and invest can help avoid money mishaps later down the road.

Adding a family member as a co-signer or authorized user can also help them build their credit history and learn to use credit responsibly. Just make sure to understand the difference between the two terms and how the other person’s credit use can affect your credit score. Make this the year you talk about money with the people who matter most.

10. Not keeping an eye on your credit score

Lastly, not monitoring your credit score for free is a financial faux pas. offers Americans a weekly free copy of their credit reports from the three major credit bureaus. You can check these reports for accuracy and file a dispute for anything that doesn’t look right.

You also may be able to check your credit score using a tool from your card issuer. This year, make it a goal to  stay on top of your credit history and correct any mistakes you find to make way for a stronger credit future.

The bottom line

While using your credit cards responsibly this year might take a little extra work, the payoff is worth a lot — from saving money to building credit to earning rewards. Bankrate’s CardMatch tool can help you choose your next card and improve your chances for approval. Find your best matches from 25 trusted banks today.