Credit cards are one of the best alternatives to cash and make purchasing products or paying for services convenient. Credit cards have gained popularity as they provide various offers like cashbacks, rewards, and discounts. These financial tools are a boon if you can control your spending and avoid these common yet some of the most serious credit card mistakes.

1.   Paying only the minimum amount due every time
When in a financial crisis, it might seem convenient to pay only the minimum amount due on your credit cards. But it is not advisable to do this every time as it hurts your credit score and increases the interest rate. High interest rates will burn a hole in your pocket as the credit card bill will keep growing every month. Instead, you should cut down on your expenses wherever possible and pay the maximum amount you can.

2.   Not paying the bills on time
Late payment of credit card bills can lead to a poor credit score, especially if you delay bill payment by more than 30 days. Besides, the credit card company will charge a hefty penalty for the late payment and may even increase the interest rates if you do not clear your debt within 60 days from the due date. You will have to pay a significant amount of money due to penalties and high interest rates.

3.   Not reviewing your statements
Not checking your credit card statements is one of the most common yet serious mistakes people make. It is advisable to monitor the transactions and verify the total amount to avoid underpaying the outstanding value. Plus, going through your statements regularly can help you check for any fraud and ensure that the credit card company has not charged you incorrectly.

4. Taking cash advances on your credit card
Taking cash advances on your credit card is one of the most serious mistakes you can commit, and it is risky too. Credit card companies levy heavy charges of up to 5 percent on cash advances. Additionally, you will have to pay interest on cash advances, which starts the day you seek the advance. There is no grace period in this case.

5. Maxing out your credit limit
Using your credit limit to the fullest is not recommended as it can harm your credit score. So, restrict your credit card spending to 30 percent of your credit limit to maintain a healthy score and ensure that you’ll be able to repay the amount without much hassle.

Credit cards are an excellent financial tool if you use them wisely and avoid these common mistakes. Ensure that you research your options and read the terms and conditions associated with any rewards, offers, and charges levied by your credit company to use it efficiently.