a credit card

I have been asked by several banks to get a credit card.

I know in Kenya people with credit cards are a handful.

But when my bankers realise I am a freelance writer, so they go, ‘It’ll be hard to get a credit card since you don’t have a ‘legit’ employer – because you work online”.

I often ask myself, why would one need a credit card after reading all the problems credit cards bring someone?

When you hear in the movies, ”Put it in the credit card”, what do you envision?

Buying things you don’t need in credit then pay for them later.


As a beginner in credit cards, you may find yourself making credit card mistakes that are quite crucial.

Some of these credit card mistakes are not really talked about so you may not really know what they are.

Credit card mistakes are the wrong practices or habits that we have when we are applying for credit cards or using them.

These credit card mistakes have the potential to hurt our credit score, which is not good for our future financial goals.

The good thing is that these credit card mistakes are easy to prevent, but you need to look out for them and avoid them.

In the article, we will learn about these credit card mistakes and look for some of the best practices for using credit cards.

This will help you to save money directly when you are using your credit card or indirectly when you focus more on improving your credit score so that you can actually save more money in the future.

20 Credit Card Mistakes You Should Know About

I will talk about the top 20 credit card mistakes you should know about and they include:

  1. Withdrawing cash from a credit card

Withdrawing cash from your credit card is a bad idea and a very common mistake that credit card users make.

When you withdraw cash from your credit card, you are going to incur some punitive damages.

Your cash withdrawal is going to be recorded on your credit file and if you do multiple cash withdrawals, a lender will find out that you are struggling financially.

This will hurt your credit score because they see you as a financial risk.

Be careful not to make this credit card mistake now that you know its implications.

  1. Maxing out your credit card

When you max out your credit card or you use too much credit utilisation, your credit score will go lower.

Credit utilisation is the number of credit dues on your credit card and how much of the total available credit you are using.

If you max out your credit cards, you are showing your lenders that you have high credit utilisation, which is not good.

You have to keep your credit card utilisation under 30% to avoid hurting your credit score.

For example, if you have $10,000 available as credit across different credit cards, you should not carry a total balance of more than $3,000 a month (30%). This is a mistake you should avoid.

  1. Applying for too many credit cards in a short period of time 

This is a mistake that you probably have been tempted to make.

You have to know that any time you apply for a credit card, you go through what we call a hard inquiry on your credit card.

This means that the lender will look at your credit file which is on your credit report.

If you do any additional inquiries, your credit score decreases by fewer than five points.

Multiple hard inquiries will have a compounding effect.

Much as different credit cards have a good sign up bonuses, avoid the mistake of applying for too many credit cards in a short period of time.

  1. Closing an unused credit card with no annual fee

A lot of credit card users make the mistake of closing their unused credit cards that have no annual fee without knowing that it doesn’t make their credit look good.

When you have a credit card open, your total available credit is higher.

This means that any balance you have is not a smaller percentage of credit that you are using.

As a result, your credit utilisation is low.

Do not make the mistake of closing your credit card because it will hurt your credit score.

  1. Only making minimum payments 

This is another common credit card mistake that most first-time credit card users make.

Avoid this. If you only make the minimum payments on your credit card, you will be left with a huge balance and once that low introductory interest you have been given expires, it will become worse for you.

When you keep a running balance, interest rates are added very quickly.

The higher the percentage of the credit you are using, the worse you will look.

Making minimum payments will cost you money in the long run and it is going to be difficult to get yourself out of this debt.

  1. Getting the wrong cards, especially early on in your credit card journey 

When you are just getting into credit cards, do not make the mistake that most first-timers do of getting the wrong credit cards.

With the many credit card options available, you have to compare your credit card before applying for a specific one.

I understand that it may be difficult to make a choice with all the ads and mail offers, but don’t go for what looks or sounds good.

The credit card company is only trying to sell you their product. It doesn’t mean it is the best.

Before you pick a credit card, ask yourself what you will be missing out on one card if you go for the other.

Is the credit card you are settling for meeting your needs?

Do your research before you make a commitment. 

  1. Not treating your credit card like cash

If you are not treating your credit card as cash, then you are making a very serious mistake.

It is very easy to overspend with your credit cards.

Something about paying for things with credit cards makes it easier to overuse them.

This is a form of credit card abuse.

Overspending means you are maxing out your credit cards and the resulting consequence is that you will have a low credit score.

You should be careful with how you use your credit cards just as much as you are careful with your cash.

  1. Carrying a balance month to month

This is a dangerous mistake that credit card users make from time to time.

It is a difficult mistake to avoid and we keep doing it even without the intent.

When you carry a balance on your credit card, you are not building your credit history or your credit score.

In fact, you are only making it worse.

What is important is that you use your credit cards, not that you retain a balance month to month.

Building a good credit history means that you can manage your debt responsibly over time and not keep a balance.

If you have a balance, you have a high credit utilisation rate which lowers your credit limit.

You need to avoid this mistake if you want to use your credit cards effectively. 

  1. Missing a payment

Missing your credit card payments or paying your credit card late is a mistake that you should not be thinking about making today.

If the grace period for paying your credit due is up and you have a credit balance due, it will hurt your payment history and your overall credit score.

If this is of any importance to you, then you need to avoid the mistake of paying your credit card dues late or missing out on them.

Your lenders want to see that you can make your payments without having to suffer any penalties.

  1. Neglecting to review your billing statement 

I would recommend that before you start making payments on your credit card balance, you need to check your monthly billing statement.

Look at the transactions listed to make sure that they are accurate and that there are no errors or fraudulent activities going on.

Review the charges on your account every few times to make sure that things are correct.

If they are not, then you need to call the credit card company’s customer service and have them correct these mistakes sooner. You cannot be too careful here.

  1. Taking out a cash advance 

Taking out a cash advance on your credit card is a very risky mistake that you should avoid at all costs.

Interest will start to accrue on the amount of cash you have taken out immediately with no grace period.

You will also incur a cash advance fee which is 5% of the cash you have taken out in advance.

Now, with all the fees that are involved in taking out a cash advance, are you willing to make this mistake?

  1. Ignoring your credit card Agreement 

Before you take out a credit card, there are terms of agreement for using the credit card.

Just like when you are signing up for a new app, you may make the mistake of ignoring the credit card terms of use.

A credit card agreement has information about your card’s interest rates, the fees, the credit card limit etc.

It will also give you details about how interest is going to be calculated and the important terms you need to know.

If you do not know the credit card terms, then you will not be aware if you are signing up for a bad credit card or not. Avoid this mistake.

  1. Hitting your credit card limit

A credit card limit is an amount you can charge to your card.

While it is acceptable to use up your credit card limit, you need to avoid this because it will only hurt your credit score.

If you hit your credit card limit, your lenders will get the impression that you have poor money management habits and you could possibly be a financial risk.

Avoid this mistake if you want to build a good reputation and increase your credit score.

  1. Waiting to report a loss of stolen credit card

Sometimes you may lose your credit card or have it stolen.

If you are ever in this situation, make sure you call your credit card company and inform them about this.

They will immediately lock your credit card account.

When people steal your credit card, they may do fraudulent activities with your card so you cannot risk this blame falling on you.

If you do not report to your credit card company that your card has been stolen or is lost, you will be responsible for all the fraudulent transactions that the perpetrator will be doing using your credit card.

  1. Loaning your credit card to someone 

Please, do not make this mistake.

I have watched the aftermath of such actions on my favourite TV show and let me tell you: they are not pleasant.

It is frustrating when the person you loaned your credit card overspends or refuses to pay their share of the amount they used on your credit card.

You will have to sue them or take responsibility for their share if you cannot get them to pay you back.

Always avoid the mistake of loaning out your credit card, either to your friend or relative.

You will save yourself a lot of humiliation. 

  1. Letting your credit card get charged off

Letting your credit card get charged off is a mistake that you should avoid at all costs.

Your credit card gets charged off when your account has become delinquent after you have defaulted on a series of payments.

The lender will have to sell your debt to a collector and write off the remaining balance as a loss.

When your credit card is charged off, your credit report is going to be impacted negatively.

You will also decrease your credit score and have a bad payment history.

Do everything you can to avoid the mistake of having your credit card charged off.

  1. Ignoring interest rates

When you are applying for a credit card, it is easy to make the mistake of not looking at the credit card features you are applying for.

This includes things like credit card interest rates. You have to know that some credit cards have high-interest rates with negative tax benefits.

These are the kinds of credit cards you want to avoid.

If you can find low-interest credit cards that are fit for you and meet your needs, you should consider them instead. You also have to take into account the interest rate that will accrue on your credit balance due if you do not pay on time.

This mistake will cost you a lot of money.

  1. Making too many inquiries 

Avoid monitoring your credit card too much. You can only check your credit score once a year when it is not regulated.

Every time you check your credit score out of the period of which you are rightfully allowed, you will have a hard inquiry done each time on your credit history.

This is not good for you if you intend to grow your credit score for the long term.

Do not make this mistake.

Instead, you can use the free credit report once a year. Don’t forget to space out your application for new credit lines so that you won’t have to go through multiple hard inquiries.

  1. Not requesting credit card limit increases

If you find yourself hitting or going above your credit card limit, you may want to call your credit card company and request an increase in your credit card limit.

You do not want to risk ruining your reputation by going above your credit card limit.

If you go above your credit card limit, your lenders will think that you are struggling financially and this may in turn damage your credit card score.

You can avoid the consequences of this mistake by asking for a higher credit card limit that will meet your needs.

You also have to make sure that you have a good payment history before you can apply for a credit card limit.

If you do not, your chances of being given a new and higher limit will be close to zero.

  1. Running high balances.

While it is not always possible to clear all your credit balances from month to month, it is a mistake to let your balances run high.

When you let your balances run too high, you will hurt your credit score.

You will also have very high-interest rates charged on the remaining balance that you have, which is going to be difficult to pay off.

If you want to avoid this mistake, do not just make minimum payments on your credit card balances.

Try as much as you can to make enough payments that will lower your credit balance.

Only making minimum payments will have you with high credit card balances to settle.

Serious Credit Card Mistakes

The following are serious credit card mistakes and they include:

Maxing out your credit limit

Making late payments

Taking cash advances

Ignoring debt

Not understanding the terms of the account agreement

What are the Disadvantages of Credit Card

The advantages of credit are:

Getting trapped in debt

The extra fees charged

Limited use

Credit cards are for certain income levels

Damaging your credit history/score.

We have all made our fair share of mistakes when it comes to using credit cards.

No one is exempt.

Whether it is your first time applying for and using a credit card or you’ve made these credit card mistakes along your journey.

The important thing is that you develop healthy credit card habits that will steer you towards your financial goals and help you identify and avoid some, if not all, of the credit card mistakes you are making.

If you want to build your credit score and secure your financial future, the first step you want to make is to identify the credit card mistakes you are making now and avoid them.

Do your research and find out how financially successful people are using credit cards.

You can also work with professionals who will give you credit card advice on what you need to stop, change or improve for better financial standing.

If you don’t have a credit card, would you be interested to get one?

Why do you want to get a credit card?




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