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Learn How to Bounce Back From Your Credit Card Mistakes

What is a credit card, its importance, and how to choose the right one?

A credit card is a beneficial financial instrument that allows you to borrow money for a short period while making a purchase and then repay it later. It helps build a credit history, which is essential when applying for a loan. Hence, you must be careful while researching the comparison of credit cards before acquiring one. It is usually issued based on your income, spending pattern, billing cycle, reward points, lifestyle, and many other factors. 

Credit Card Risks 

As much as credit cards are helpful, they can quickly turn into a debt trap if managed unhealthily. You must use a credit card within the credit limit to never overstep your credit utilization limit, and your credit score is not adversely affected. In addition, credit card users must be aware of the grace period offered and interest charges while making a comparison of credit cards during application. Unlike debit cards, credit card users face less risk of fraudulence. Nevertheless, even the most experienced credit card users are prone to making mistakes and being clueless about them.

Although credit card mistakes negatively affect the credit score, here’s great news! The damage done on credit score is reversible, and adopting a few healthy spending habits repairs your credit profile.

Difference between Debit Card and Credit Card

A debit card is a financial instrument that operates differently from a credit card. The difference between debit and credit card is that the former is linked to a bank account, and whenever a purchase is made, the bank account is debited. At the same time, a credit card is more of a short-term loan issued by the bank and is repaid by the user by the end of the credit period, either in whole or part.

Common Credit Card Mistakes

Lapse in payment

While it is common to miss a credit card payment in the middle of a busy schedule, skipping the due date attracts a late fee/penalty amount added to the payable amount. While it is not impossible to have this late fee waived off by the bank, it is a hassle to go through the lengthy process of conversing with the bank authorities on the matter. If you overstep the bill payment period by 30 days, your credit score is expected to take a hit. 

Using up the entire Credit Limit

A first-time credit card user may not have a higher credit limit. Also, it becomes challenging to curb its usage and not exceed the approved 30% of the credit limit. But, in a contingent situation, it is still acceptable if the spending becomes imperative and the entire credit limit is exhausted. But, maxing out your card as a routine is what affects the credit score adversely. If you own multiple credit cards, all you need is a credit card comparison so that a wise spending habit can be established without overstepping the credit limit.

When Expenditure is more than capacity to repay

The difference between a debit card and a credit card comes into play here. Credit card users are prone to overuse credit cards because they are a more accessible alternative to cash purchases. The unpleasant truth dawns upon the credit card user when the credit card bill becomes due and is far from affordable. Such unhealthy spending habits lead to falling into an expensive debt trap. Sometimes, outstanding bill payments cascade into an unaffordable amount of debt over time.

Abruptly closing the credit card

Although it seems correct to dispose of your credit card and opt for cash spending habits, it lowers your credit score. If you retain the credit card for an extended period and do not use it, except to stay active, the credit history becomes very strong. Hence, you must not close a credit card impulsively without thinking about its effect on the credit score.

Lack of scrutiny of credit card bills

It is necessary to screen your credit card bill for any suspicious charges. Penalties for late payments or similar charges are never large amounts are mostly waived off upon request. Also, screen your credit card bills carefully for theft or fraudulent transactions.


  1. Use strong reminders for p credit card bill payment ahead of the due date. You may also opt for a direct debit option to pay bills on time, keeping the balance in the bank account at its minimum requirement. 
  2. It is not advisable to use your credit card on every single purchase. It should be alternated with other modes of payments too. The credit limit also can be increased upon request; it is not sufficient. 
  3. Overusing a credit card is possible, mainly because it involves no physical discretion of actual money. Planning your finances over a while is prudent, and overspending above budget can be avoided.
  4. Although it seems safer to get rid of the credit card to avoid overuse or fraud, it is not prudent for your credit score. 
  5. It is crucial to check your credit card statement for every billing cycle. Any suspicious charge should be scrutinized and reported to the issuer so a new card can be issued to rule out any further financial damage.


Credit cards have their merits and demerits, like any other financial instrument. Therefore, it is up to the user to use the credit card prudently and at the same time aim at maintaining the rating to the highest.

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