Credit cards can be a great way to build your credit score and earn rewards, but if you're not careful, you can easily make mistakes that can damage your credit score and cost you money. In this blog post, we will discuss 5 of the most common credit card mistakes and how to avoid them.

Did you know credit cards can be used for more than just swiping to make a purchase in a store or online? You can also take advantage of your credit limit to do a cash advance and withdraw cash or use a balance transfer to move a balance from another credit card.

So you’re ready to establish or build your credit score and are looking for ways to do it? In your credit building research, you’ve probably come across the recommendation to open a credit card. On one hand, credit cards can help you build credit, earn rewards and access exclusive benefits, and provide you with extra cash flow when you don’t have the money at your disposal. On the other hand, a credit card could hurt your credit score, your credit history, and your wallet if you used too much of your limit, carry a balance and rack up interest charges, or miss a payment. Since this financial tool comes across as a blessing if used properly and a curse if misused, you may want to avoid credit cards altogether.

Short and sweet? Yes, your credit score will decrease when you officially apply for a credit card. But don't worry - The drop is temporary and the score increases after a couple of weeks and the benefits of having a credit card far outweigh the initial drop in score. By that time, you could be using your credit card responsibly where the lender reports your positive credit card activity to the bureau. In turn, that positive activity will boost your credit score even higher

Ok, let's just rip the band-aid off and get straight to it - How many credit cards is too many? There's no exact number of credit cards to have, and it varies for every credit cardholder. It’s certainly good to have one, but it wouldn’t be bad if you had two (or six!) credit cards sitting in your wallet today. What really matters is how you use it. It's a frustrating answer, right? But don’t worry – I can explain…. The cool thing about credit cards is the benefits, and there are so many to choose from! There are store credit cards, cards specifically for air travel, and more credit cards offering cool rewards and perks like cash back or discounted rates at your favorite restaurant. Having options of which credit card to use before making a purchase can feel like you’re 100% covered where you have the flexibility you need for the unexpected. Especially if you're not carrying large amounts of cash. "But how many credit cards is too many?!" As an undergrad, this was my question when I received multiple credit card offers in the mail. It was sooo tempting to apply because the offer meant more credit power at my disposal if approved. But I also had other questions that came with that: What would multiple credit cards mean for my credit score? Would it hurt or help my score and history? Is there a penalty for having too many credit cards? Could I wind up incurring more debt? What should I do with my current credit cards? These are all excellent questions to ask when you’re thinking about applying for another credit card and if you already have two or more. Understand there is a risk of having multiple credit cards and there are benefits but it depends on a few factors.

Have you ever been confused when your financial institution offered you a line of credit and not a credit card? When I was first introduced to financial products, the product I was very familiar with was credit cards since many people had them. But when I was offered a line of credit from my credit union, my immediate response was “Huh? I thought my credit card was a line of credit?!” I knew I could use my credit card to pay for things as I need them, withdraw funds from my card if needed, and was earning cool rewards and other perks with the card, so I didn’t understand the benefits (or the difference) of a line of credit. The first time I understood how a line of credit worked was when it came in handy at my cousin's wedding nearly six years ago. The venue cost $21,000 and credit cards were not accepted as a form of payment. Luckily, my aunt had a line of credit account with her bank and she was able to write a nice check for the full amount. Go, Aunt Viv! In the example with my aunt Viv, the huge difference between a line of credit account and a credit card is that lines of credit accounts often give you access to a larger credit limit than credit cards and gave her immediate access to the cash without the vendor worrying about her card getting declined. In this article, I’ll cover more differences and similarities, so you have a better idea of which kind of loan would work best for you. Ready?

Selecting a credit card isn’t always easy. There are plenty of cards out there provided by tons of different lenders, so it’s easy to ask yourself “Which credit card is right for me?!” Before you make that decision, it’s important to understand credit cards fall into 2 different buckets - secured and unsecured. Between unsecured and secured credit cards, one has higher approval odds even if you have a low credit score, and the other offers lower interest rates with great reward perks. Can you tell which one offers which? Luckily, you won’t have to guess! Since I’ve had my fair share of experience with credit cards, and I’ll share the key differences between the two and what to prepare for so you can determine which card is right for you.

Having a financial cushion in place to cover expensive purchases and sudden emergencies is what a credit card is great for. But having a credit card or multiple credit cards with a hefty balance or a super-duper high-interest rate on top can be too much to bear.

If you have a credit card or a line of credit (like a Home Equity Loan), chances are you’ve heard the term “Revolving Credit.” But, what the heck is it?! Revolving credit is a type of loan borrowers can repeatedly use to finance purchases and emergencies if needed. Borrowers must repay the amount they used to finance that purchase but they get to reuse that amount again. Hence the term revolving!