Don’t Make These 6 Common Mistakes When Managing Your Credit

CreditDeveloping a good credit habit is a vital step toward improving your finances. The average American holds more than $5,000 in credit card debt, but when combined with a mortgage, auto loan, student loan, and other outstanding payments, that figure climbs up to over $92,000.

That is a considerable amount. While debt is typical, better handling can be done. Here are examples of mistakes you should not make when managing credit:

1. Not Paying Off the Balance

A significant mark on your credit report is something called the credit utilization ratio. This refers to the amount you owe compared to how much credit you have. For example, if you carry a $10,000 balance on your credit card, your credit utilization is 10 percent.

Since charging more than you can afford to pay is a common mistake, you should always only charge up to only about 30 percent of what you can pay off each month.

2. Not Monitoring Your Balance

It is easy to charge more than you can afford on your card. You should always keep track of your card balance and only charge up to, at most, 30 percent of what you can pay off each month.

If you are struggling with credit card debt, you should consider taking financial actions that will help you become debt-free. You can consider debt management programs or debt settlement.

You can even take advantage of bankruptcy if needed. If you are unsure of your options, seek help from a professional.

3. Not Paying Enough

Most people do not pay off their cards by the due date or only pay minimum amounts. This increases the interest rate and leads to missed payments, late fees, and higher rates.

The best thing is to pay off the charge every month. If you do not have enough money to do that, you can always take out an installment loan.

You can get more money for the payments by asking the lender to include the charges in your budget.

4. Not Adjusting Your Budget

If you have had out-of-control charges on your card, you might have to adjust your budget. If you have car troubles, medical bills, or other more essential expenses than paying for your credit, you should get rid of the charge. You can get a home equity loan or line of credit to help you out.

5. Using Credit Cards on Everything

Another common mistake is using your cards on everything. If you use your card for groceries, gas, or other expenses, it will be hard to track your spending. Keep track of every single payment. If you are not sure, consider getting a budget planner.

6. Using Your Card for Cash Advances

Cash advances are usually made through your credit card, and they are the highest interest rates on cards. If you use your card to cover balances on other cards, you are usually hit with an interest fee on the cash advance.

The best advice is to avoid using cash advances, especially if you are struggling with debt.


There are many common mistakes that people make when handling their credit. Even when you are in debt, you can still improve your credit by following these simple tips.

If you consult a professional for help, you can get out of debt much faster. It takes time to improve your credit, but you will feel better when not paying for these cards.

At Athens Finance, lending is our business, and customer service is our ambition. We offer a variety of personal loan sizes to fit your needs and will put you on an affordable payment plan after reviewing options.

We do not make payday or title pawn loans and there are no hidden fees. Your well-being is our highest priority, and we hope to earn your future business through a satisfactory experience. If you need to take out a personal loan in Athens, AL, to consolidate your debt, get in touch with us! We’re happy to help!

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