You probably know people who have experienced financial stress, declining credit scores, and lifelong debt struggles because of credit cards. However, credit cards can be a helpful tool for managing your finances if used correctly. To make credit cards a positive aspect of your financial life, avoiding common and costly credit card mistakes is essential. Here are eight unhealthy credit habits that you should stop doing immediately.

Making purchases without a budget can lead to debt. Keep track of your spending, and remember that carrying a balance will cost you more in interest if paid off slowly. Only paying the minimum due is not a good idea, as interest will continue to accrue and keep you in debt longer. Late payments result in a fee and negatively impact your credit score. High credit utilization can also hurt your score, so keep it below 30%. Check your credit statement for fraudulent activity and recurring subscriptions. Space out credit card applications and use them strategically to take advantage of rewards and benefits. Avoid closing old cards, as it can shorten your credit history and impact your credit utilization. By improving your credit habits, you’ll avoid debt, unlock access to better products, and lower borrowing costs.

Please note that this article is purely for educational purposes and does not reflect the views of NY TEAM Federal Credit Union.