Did you know that credit card debt in the United States has hit a record high with $1.04 trillion owed? On top of that, the average credit card balance of card holders continues to grow, with the average balance for Massachusetts residents at $6,327. While irresponsible swiping by cardholders is one factor that has caused this amount to increase, there are also numerous other bad credit card habits that Americans have fallen into using.  If you’re struggling to manage your credit cards, consider the following harmful habits that may be hurting your debt and credit score.

Paying your credit card bill late

Ignoring the due date of your credit card is the number one bad habit to avoid. Not only do frequently late payments cause fees, but making a late payment also prompts higher interest rates and lowers your overall credit score. If you regularly pay your credit card bill late, the rates that you receive for any future loans will most likely be impacted. By simply forgetting to pay your credit card bill on time, you risk paying thousands of dollars more on interest and fees over time.

Charging your card for everything

Another damaging credit card practice is frequently charging your card. While it’s tempting to swipe your card on all of the purchases that you don’t want to pay right now, it’s best to use your credit card only for necessary expenses or emergencies. A general rule to follow is to avoid using your credit card on purchases that you will not be able to pay off within the month.

Applying for lots of retail credit cards

Today, almost every retail store offers its own store credit card, promising coupons, discounts, and rewards. Retail credit cards typically have much higher interest rates, with APRs even as high as 30%. Not only that but having a bunch of open retail credit cards is a risky practice. It becomes easy to miss a payment or max out a card without realizing it. Remember that with more store credit cards in your wallet, the more tempted you’ll be to spend, and you’ll have more monthly payments to cover.

Not checking your statements

One dangerous habit that many credit card holders do is not reading over their statements each month. If you fall into the habit of not thoroughly reading through your statements, you may be unknowingly paying for billing errors or even fraudulent charges. To avoid this, keep all of your receipts as a way to cross check your bill and ensure that there are no spots where you are being overcharged. If you see purchases that were not made by you or any billing errors, report these immediately before you pay for a mistake.

Only paying the minimum on your balance

While credit cards typically only require you to pay a minimum of just 1-2% of your balance, carrying around a large monthly balance is a habit that is potentially harmful. Carrying around a month-to-month balance drastically increases the amount you will spend on interest over time. If you continue charging your card without ever making a dent in what you owe each month, you risk falling into serious debt.

In addition, it is damaging to your credit score to only pay a small amount each month. One factor that is calculated into your credit score, called credit utilization, is the ratio of your current balance to your credit limit. Generally, if this ratio is larger than 30% it will negatively impact your credit score.  

If you fall habit to any of these dangerous practices, it’s time to improve how you use your credit card. CTFCU’s financial education center offers an online course all about using credit cards so you can learn more about the best practices to implement. In addition, CTFCU offers a low-interest, no-fee MasterCard which makes using a credit card the right way easy and worry free.