We all know that, used properly, credit cards can be great tools. Unfortunately, it’s also easy to fall into the debt trap, making mistakes that can result in paying a lot in interest. After you find the credit card that fits your needs and you want to be able to make the most of your credit card, and avoid the pitfalls of credit, do your best to avoid these 5 credit card mistakes almost everyone makes — at least at first:

1. Not Tracking Your Spending

When you have a credit card, since it’s not coming out of your checking account, many people don’t think it’s necessary to track spending. The problem with this is that you can be unpleasantly surprised by how quickly it all adds up. Taking the time to track your credit card spending can keep you on your toes — and within your budget. If you don’t know your current balance, you could easily go over your limit, incurring fees.

2. Not Realizing when Your Intro Period is Over

Balance transfer deals are great. You can get 0% or interest, or some other low interest rate, and you start making serious inroads on your principal. It can even be fun to buy things, knowing that you aren’t paying interest. However, if you forget when the intro period ends, you could be stuck. Plan to pay of transferred balances by the intro period, and don’t get too comfortable carrying a balance.

3. Failure to Reconcile Your Account

You should regularly reconcile your credit card account. Check to make sure that your records match with the records from your credit card issuer. This is also a good time to check for fraudulent purchases. If you don’t regularly reconcile your account, you might miss mistakes, as well as not see evidence of identity fraud. Regularly checking your account can ensure that you catch mistakes — and fix them — in a timely manner.

4. Forgetting to Update Bill Pay Information

When you are issued a new credit card after your old one expires, you need to remember to update your automatic payment information. If your satellite TV service is on the card, and you haven’t updated the information, you might have your service interrupted. Not only that, but you might be charged an extra fee due to the “returned” charge. Additionally, if the service is quick to report to credit agencies, you could see a ding on your credit report for a missed or late payment. Whenever you have automatic bills paid with your credit card, or if you have the information saved for other payments, you need to update it to avoid problems.

5. Failure to Check Your Credit Report

You should also check your credit report to make sure that everything is accurate. When we applied for a mortgage a few years ago, we discovered that one of our credit cards was listed twice. It looked as though we had more debt than we did! Other issues that can be caught when you regularly check your credit report include fraudulent accounts, inaccurate information about your payment history, and wrong information about how much you owe. Make sure to check your credit report regularly and fix any mistakes that appear.



Miranda is freelance journalist. She specializes in topics related to money, especially personal finance, small business, and investing. You can read more of my writing at Planting Money Seeds.