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Credit cards may be a convenient way to make purchases, and the fact that they reward us for buying the things we already need is reason enough to keep using them. But if you abuse your credit cards or mismanage them, they'll only end up hurting you. With that in mind, here are a few credit card mistakes to steer clear of in 2021.
1. Only making your minimum payments
When money is tight and you're carrying a credit card balance, it's tempting to only make your minimum payment and buy yourself some wiggle room. But the longer you carry a balance, the more interest you'll accrue on it. Not only will that cost you more money, but it'll also put you at risk of hurting your credit score. A better bet? If you can't pay off your balance in full, don't just settle for making your minimum payment -- pay as much as you can until you're out of that hole.
2. Applying for too many new cards at once
You may find yourself on the receiving end of some great credit card offers in 2021 -- perks like bonus cash back or extra rewards. But tempting as it may be to take advantage of all of these deals, you're better off limiting yourself to just a few. The more credit cards you apply for, the more hard inquiries you'll have on your credit record, and while a single hard inquiry isn't a big deal, multiple inquiries could have a negative impact on your credit score. Also, the more cards you have, the easier it'll be to overspend, so aim to identify those deals that are truly outstanding and let other offers pass.
3. Not checking your account statements
Many people pay their credit card bills without checking their monthly statements first to see what charges they've racked up. But if you don't take that step, you'll potentially risk falling victim to fraud in a scenario where someone's gotten a hold of your credit card and ran up charges on it. Furthermore, if you don't check your account statements, you won't have a sense of what you're spending on, which could fuel poor habits. For example, you might think you only drop $50 or so a month on takeout, but if you check your credit card statements, you may find that number is actually more like $100, so make it a point to examine those records before paying your bills.
4. Storing your credit card information on your phone, laptop, and tablet
Saving your credit card details on your various devices may seem convenient, but it can easily lead to overspending. This is especially true if you tend to browse retail sites during your downtime. You're better off not storing that info so that if a purchase really tempts you, it'll be just a bit harder to actually go through with it.
The last thing you want to do in the coming year is rack up excessive credit card debt, damage your credit score, and open yourself up to fraud. So don't let those things happen. A few smart moves on your part could help you better manage your credit cards and ensure that they serve you well from the start of 2021 through its finish.
