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It may come as no surprise that many people find themselves in trouble when it comes to credit cards and the holidays can only make it worse. With the biggest shopping days still to come, it is important to know the common credit card mistakes that can ruin your credit score or cost you big.

In Pennsylvania alone, the average credit card debt is just over $5,500 and the average American holds 52% more debt today than they did a decade ago. Have you made any of these mistakes?

Common Credit Card Mistakes

Missing a payment

Besides leading to late fees and added interest, missing one payment could cause your credit score to drop by 60 to 110 points, especially if you’ve had an impressive one to begin with. Your best bet is to pay your bills on time every month; consider setting up auto-pay online so you never miss a payment.

While paying the minimum amount is better than missing a payment, it can also cause problems. Making the minimum payment on your credit card not only increases the amount of time it takes to pay off your balance, it also increases the amount of interest you pay. Increasing your monthly credit card payment helps you pay off your balance sooner and at a lower cost. If possible, the best way to manage your credit card is to pay your bill in full each month. This prevents you from gaining interest and will save you more in the long run.

Ignoring Monthly Statements

Of the most common credit card mistakes, this may be the easiest pitfall to avoid. As soon as you receive your monthly credit card statement, take a few minutes to look it over. Mistakes happen, so ensure there are no strange charges. The sudden appearance of unfamiliar charges can also signal identity theft. Learn more about what to do to avoid identity theft, here and call your lender immediately to report any discrepancies.

Reading your bill can also help you understand how long it will take to pay off your debt. The length of time to pay off your balance by making minimum payments will be shown. It will also show how much you would need to pay each month in order to pay off your balance in three years. These numbers could act as a wake-up call for you to increase your monthly payments if you are currently dealing with credit card debt.

Also, pay attention to the various interest rates you pay on purchases, cash advances and the like. Lastly, it never hurts to double-check the due date of your bill to avoid late fees.

Cash Advances

Speaking of cash advances, avoid using them unless it is an emergency. Many people don’t realize this is one of the most damaging common credit card mistakes! If you take a cash advance, you’ll incur sky-high interest charges and will likely pay an upfront fee for the service as well. Interest rates tend to be 6-10% higher on cash advances than on other purchases and there are no grace periods. This means the interest starts accruing right away, rather than at the end of the billing cycle.

For example, if you take out $1,000 with your Citibank Platinum Select card, you will be charged a $50 fee. The APR, which starts being tallied immediately, will be 25.24%. That’s 5% more than the highest rate for purchases. If you pay back the advance within one month, you’ll owe $21 in interest on top of the $50 fee.

The longer you take to repay a cash advance, the worse it will get. Wait one year and you will owe more than $250 in interest on top of the original $50 fee. Cash advances are a quick way to add debt and should only be used in emergencies.

Using Only One Card

While using only one card isn’t bad in and of itself, using a large portion of your credit limit can hurt. Regardless of how many credit cards you have, the total amount of available credit you have on each card can affect your credit score. To protect your credit score, some experts advise spending no more than 30% of your credit card limits. For example, if you have two credit cards, each with a limit of $1,000, you could spend $300 on each card for a total of $600 and still be under the 30% rule. If you only had one card and had to spend the same $600, you are at 60% of your credit line, which could harm your credit score.

Ignoring your credit score

The best way to pay less on your credit cards is to improve your credit score. However, it can be difficult to improve your score if you don’t understand how it is calculated.

A FICO score is the most common credit score.

Five major factors go into a FICO score:

– Payment history (35%)

– Amounts owed (30%)

– Length of credit history (15%)

– New credit (10%)

– Types of credit used (10%)

All it takes is a poor showing in one of these categories and your score can drop and failing to pay attention to your score can cause major damage.

Let’s say you always pay your bills on time and have had a long history of credit, but you typically spend 90% of your available credit limit. The percentage for credit utilization ratio, can drag down the “amounts owed” portion of your FICO score because it signals to lenders that you’re a risky borrower. Using closer to 30% of your available credit can raise your score because you’re telling lenders you have your spending under control.

You should also request a free copy of your credit report every 12 months at Some credit card companies even give you a free of your FICO credit score on your monthly statements for easy tracking.

These common credit card mistakes can wreak major havoc on your bank account and your credit score. For even more ways to protect your finances, just call us at 724-929-2300. We can tailor an insurance policy to fit your needs for auto, home, life and more! Save more than money when you call and let us do the comparing for you. With holiday shopping and deal hunting coming, leave the hassle of finding the right insurance at the best price to us.