The 7 Deadly Credit Card Sins


“Card”-inal Sins
Credit cards can be a great asset or a great liability, depending on how a cardholder uses them. While you probably won’t go to hell for committing any of these sins, the financial situation you will find yourself in afterwards can certainly cause some pain to your pocketbook and damage your credit score. Read on to find out the seven deadly credit mistakes you should avoid at all costs.

Gluttony: Bumping Up Against Your Credit Limit
Just because your issuer awarded you a $6,000 credit limit doesn’t mean you should max the card out. For starters, those who aren’t able to pay off their balances in full increase the likelihood of winding up in debt, since they’ll be subject to the interest on their purchases. Secondly, bumping up against your credit limit is likely to have a negative overall impact on your credit score.
“The closer you get to your credit limit, the riskier your credit profile is going to look,” says Chris Mettler, founder of, since it leads to a high credit-to-debt utilization ratio. Mettler says a best practice is to use credit in moderation, using only 15% or less of your total credit at any given time. And yes, you should also pay off all those balances in full by the end of the month whenever possible.
Pride: Not Checking Your Credit Score
You might assume your credit score is in fine standing based upon a presumably stellar payment history, but the truth of the matter is that credit reports can easily contain errors. And the more egregious ones, like inaccurate delinquencies or improper credit limit information, can cost you more than a few points on your accompanying credit score.
As such, consumers should check their credit report at least once a year – especially since you’re entitled to one free copy each year, thanks to the Fair Credit Reporting Act – or right before you apply for a big loan, to minimize the chance that you’ll encounter any surprises.
Lust: Applying for Too Much Credit
Lucrative sign-on bonuses can certainly be attractive, but that doesn’t mean you should apply for every credit card that’s touting one. Too many credit card inquiries – generated by lenders who are looking to see if you deserve a new line of credit – in a short timeframe can also negatively impact your credit score. Instead, apply for credit as you need it and add a new card to your payment arsenal about once a year until you’ve got three or four you can consistently pay off on time at your disposal.
Source: Yahoo Finances / MainStreet |  Jeanine Skowronski