5 Credit Card Mistakes Almost Every Newbie Makes

Kids learning to ride a bike are most likely to make mistakes. Why? Because the feeling of being on a bike with no training wheels is unfamiliar to them. Similarly, young adults just starting out with credit are also more prone to making mistakes – because credit cards aren’t like any other financial product they’ve used. Here are a few mistakes almost every credit card newbie makes. You might have even made some of these when you first start out with credit cards.

Signing up for a credit card without comparing. Excited at the chance to get a credit card, many first time credit card users apply for the first credit card they’re offered without shopping for a better deal It’s always best to compare credit cards before applying to be sure there's not card with better benefits available.

Missing a payment. It's not until you feel the sting of paying your first late fee do you realize the harsh consequences of missing a credit card payment. Hopefully, it only takes one missed payment is all it takes to inspire you to keep your credit card payment habits in check. After one missed payment, the late penalties get stiffer with a higher interest rate and ding to your credit score.

Charging things you can’t afford. At first, your credit card seems like free money. Often it’s not until you have to start repaying your credit card balance that you realize you can’t use you cant just run up a big credit card balance. Young adults just starting out with credit may also overestimate how far their income can stretch and create a bigger balance than they can afford to repay.

Opening more than one credit card. One credit card is enough to start out with, but new credit card users are often so excited to venture into the world of credit cards that they sign up for a second credit card within a few months. Even experienced credit card users have trouble juggling multiple credit cards; it's even harder for someone just starting out with credit.

Chasing rewards. The possibility of earning points, miles, or cashback is alluring. So much so that new credit card users can easily be tempted to run up big balances with the hopes of earning more credit card rewards. Let the rewards be a natural benefit you get from using your credit card, not something you actively seek to earn, at least until you build a habit of using your credit card responsibly and paying your balance in full each month.

Some credit card mistakes will follow you for several years, so avoid them at all costs to build and protect your good credit score.