10 Most Common Credit Card Mistakes To Avoid In 2024

Credit cards can help you build credit and offer a variety of consumer-friendly rewards—things like cash back, travel perks, points, statement credits and more. But in order to best benefit from using a credit card, understanding and avoiding the most common credit card mistakes is essential. This way, you can spend responsibly, pay off your bills, avoid misuse and take advantage of the perks your cards provide.

10 Most Common Credit Card Mistakes To Avoid in 2024

1. Picking the Wrong Card

Different cards work best for different people. Whether you’re an avid traveler, a small business owner, a busy parent looking to get some cash back or a student, there’s a credit card for you. There are even credit cards that are ideal for consumers with bad credit.

But picking the right card for you is crucial for financial success. Someone who never travels won’t benefit from a card that offers airport lounge access, and students just starting to build credit probably won’t want a card with a hefty annual fee. Start by making a list of priorities, including what benefits and perks are important to you, what fees you’re willing to pay, and your credit score. Then, choose a card that best fits your financial situation and lifestyle.

2. Losing Track of Your Card’s Renewal or Other Key Dates

Once you get your card, create a recurring annual event in your calendar for your card renewal date and when you may be charged an annual fee. You might also want to note when any introductory APR offers expire or when any benefits should be used.

For example, The Platinum Card® from American Express offers two $50 statement credits to use each year at Saks Fifth Avenue. However, not only will you need to register for the offer, you’ll have to use the first credit within the first six months of the year and the other credit in the second half of the year. Staying on top of these types of details ensures you’ll get the most out of your credit card.

3. Underutilizing Your Bonus Categories

If you hold more than one credit card, brush up on each card’s bonus categories so you can earn additional points or cash back for specific spend. For example, one of the cards you hold may offer additional points on gas while the other gives extra cash back on dining out.

Remembering the details of these benefits means you can reap the most rewards by spending on the right card. Depending on the number of cards you hold, you may even want to consider creating a cheat sheet that features everything you need to know about each card so you won’t miss out on any benefits or earnings opportunities.

Some cards, like the Chase Freedom Flex℠* or the Discover it® Cash Back, offer lucrative 5% rotating bonus categories that require activation each quarter and are subject to a spend cap. If you have one of these cards, consider setting a quarterly reminder to activate your bonus categories so that you’re always earning the 5% rewards rate on eligible purchases.

4. Missing a Monthly Payment

We get it. We’re all busy and it’s easy to forget things. But when it comes to paying off your credit card bill, missing the due date can mean ending up with late fees in addition to accruing interest on your unpaid balance.

Set up autopay so you’ll never miss a payment. Most credit cards offer autopay options that let you pay just the minimum payment, but you’ll need to pay off the full statement balance to avoid interest charges.

5. Overspending

Unless your credit card comes with a 0% introductory APR offer, carrying a balance means you’ll pay interest on your purchases which will quickly negate any rewards that the card offers. Only buying what you can afford to pay off in full each month is the best way to avoid getting into debt.

6. Leaving a Welcome Bonus on the Table

A welcome bonus can be one of the most valuable benefits of signing up for a new credit card. When offered, it allows cardholders to earn additional rewards for hitting a spend threshold within a certain period of time. While not all credit cards feature welcome bonuses, many do.

If you sign up for a card that has a new cardmembers bonus offer, note the amount you have to spend and prioritize spending on that particular card until you reach the threshold. You may also want to add a calendar reminder for the welcome bonus spending deadline.

7. Using Credit Cards for Cash Advances

Some credit cards offer the option to get a cash advance. However, in addition to coming with one-time fees, cash advances often have higher interest rates. And unlike with purchases, grace periods don’t apply to cash advances so interest begins to accrue immediately. Try not to use your credit card for a cash advance unless absolutely necessary.

8. Using Personal Credit Cards for Business Expenses

With so many business credit card options out there, there’s no need to be putting business spend on personal credit cards. Getting a business credit card means you can stay organized, keep your business and personal expenses separate and earn additional rewards. Plus, business credit cards usually offer business-related perks and advantages, too.

9. Using Too Much of Your Available Credit

Credit utilization is how much of your available credit you’re currently using. You can find out your credit utilization percentage by dividing your credit balance by your credit limit and then multiplying that number by 100.

Generally the lower your credit utilization rate the better when you’re trying to build a strong credit score. And for the best credit scoring results, aim to keep your credit utilization rate at 30% or less.

10. Canceling a Credit Card Instead of Downgrading

Closing a credit card can lower your credit score in multiple ways. It’s likely to increase your credit utilization ratio and it may also decrease your credit mix, two factors that contribute to your credit score. And while it’s not an immediate concern, when the closed account falls off your credit report in 7-10 years it could also ding your credit score by lowering the average age of your credit accounts.

If you’re wanting to rid yourself of a hefty annual fee, canceling may not be your best move. Instead, you may want to call your credit card issuer to see if you’re able to product change to a card that has a lower annual fee or none at all. Downgrading rather than canceling could help you cut costs while also avoiding the negative credit score impacts that can come from closing an account.

Bottom Line

There’s a lot to consider when getting and maintaining a credit card and the stakes are high as some missteps can ding your credit or lead to an accumulation of high-interest debt. Avoiding the top credit card mistakes ensures you’ll get the most out of your credit cards in 2024 while avoiding the biggest potential pitfalls.