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Do your best to avoid these at all costs. 

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It’s common to make New Year’s resolutions, and if that’s a habit of yours, 2023 may be no exception. Now come January, you may be resolving to save more money, eat healthier, and spend less time on social media, to name a few popular pledges. But another item to put on your list is “avoid credit card blunders.” In fact, these are some of the worst credit card mistakes you can make in 2023 and beyond, so you’ll want to do your best to steer clear of them.

1. Only making your minimum payments

If you make your minimum credit card payments every month, you won’t be counted as delinquent on those bills. And that means your credit report won’t feature a series of late payments, which is important.

But while only covering your minimum payments may not hurt your credit score by virtue of late payments, not paying your credit cards off in full could cost you a boatload of money in interest. This especially applies these days given that recent interest rate hikes have made credit card borrowing more expensive.

2. Hitting your spending limit

Maybe you’re able to hit your spending limit across your credit cards and still pay off a nice amount of your balance each month. Even so, reaching your spending limit isn’t a great idea.

For one thing, what happens if you max out your credit cards and then you need to use one in a pinch? In that scenario, you’ll risk having it declined.

Also, from a credit score standpoint, too high a credit card balance can spell trouble. In fact, any time you rack up a balance that exceeds 30% of your total available limit, you risk a hit to your credit score. So if you’re reaching your spending limit, it means your credit score might really take a dive, making it harder to get approved for a personal loan or line of credit the next time you need one.

3. Closing out credit cards you’ve had a long time but don’t use

You might assume that if you have a credit card that’s collecting dust in your wallet, that you might as well cancel it rather than let it sit there unused. But if it’s a credit card you’ve had for a long time, that could cause your credit score to plunge.

One factor that goes into calculating credit scores is length of credit history. If you close out a credit card account you’ve had open for 10 years, and then leave yourself with cards you’ve only had for a year or two, it will shrink the length of your average open account and most likely drag your score down in the process. So if you’re talking about a credit card that doesn’t charge an annual fee, don’t cancel due to a lack of usage — just store that card somewhere safe and let it be.

Sometimes, seemingly innocent credit card moves can result in a world of trouble. Do your best to avoid these errors so you don’t end up racking up scores of interest or damaging your credit score in the new year.

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