Perhaps the most dangerous pitfall to avoid when using credit cards is allowing past-due payments to pile up. Debts either not paid on time or soon after the due date have a significant negative effect on your credit rating, which any number of lenders look at as a representation of your ability to make reliable payments. Outstanding debts are subject to a card-issuer’s interest rates. These rates are determined by the states and can be retroactively charged to your debt ¾ making that debt more difficult to pay off.
Pay attention to your spending. Although credit cards can nurture a spend-now-worry-later mentality, failing to consider the long-term costs of your purchases is a sure way to end up in debt.
Use your credit card to pay for smaller items that you will be able to pay off before you are charged interest. Avoid using a credit card to purchase big-ticket items that are more likely to be impacted by interest. One of the most significant reasons to have and use a credit card is to build up your credit history; by making good spending decisions your credit history and subsequent credit score will be robust. The advantage of a good credit score and credit history is that it helps to place you in a better position when applying for loans.