Here Are the 5 Worst Credit Card Moves to Make in Your 20s

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Managing your credit is essential, no matter your age. 

It’s beneficial to start learning essential personal finance skills in your twenties. The sooner you establish your credit and get more comfortable managing your money, the better off you’ll be in adulthood. Using credit cards with care is essential so you don’t harm your credit or rack up debt. But you can learn how to avoid making costly mistakes. These are the worst credit card moves you can make in your 20s.

1. Not opening a credit card

Many young adults fear using credit cards because they assume they’re risky. Credit cards can be dangerous if you rack up debt and aren’t careful. But if you use your credit cards carefully, they’re a helpful financial tool. Credit cards can help you build credit and teach you valuable money management skills.

If you haven’t yet gotten your first card, that’s a mistake. Your 20s are an excellent time to open up your first credit card so you can learn how to use them to your advantage. Are you looking to open your first credit card? Here’s a list of the best credit cards for young adults.

2. Only making minimum payments on your cards

Pay attention to the total balance when you get your credit card bill. You’ll be charged interest if you only make the minimum payment you owe. Most credit card interest rates are high. Those fees can add up, and the debt can quickly pile up. Pay the entire card balance off every month. When you do this, you won’t be charged interest and won’t be at risk for accumulating debt.

3. Not paying attention to credit card fees

It’s possible to avoid being charged credit card fees, but you need to know what they are. Before opening a credit card, make sure that you review the card details to understand all of the potential fees. Here are some examples of common credit card fees to be aware of:

Annual feesLate payment feesForeign transaction feesCash advance fees

If you make the right moves, you can avoid being charged extra fees like these. When it comes to annual fees, not all cards charge them. No annual fee credit cards are available if you’re looking for an affordable credit card with no yearly fee. And if you know you’ll be using a credit card while traveling outside the country, consider the best travel cards, many of which don’t charge foreign transaction fees.

4. Not monitoring your spending habits

No matter how you’re paying for something, it’s always a good idea to monitor your spending habits. However, when using credit cards, you must be aware of your spending because you’re using borrowed money that isn’t yours and will need to pay it back.

Make sure that you pay attention to your card usage. The best practice is only to charge what you can afford to pay off, so you don’t fall into credit card debt. If you struggle with overspending, you can set up spending limit alerts through your card issuer. Another option is to use budgeting apps to monitor your spending.

5. Paying your credit card bills late

Now is the time to develop responsible spending and payment habits. When you pay your credit card bill late, your card issuer will charge you a late payment fee. Fees like this are a waste of money. Another reason it makes sense to pay your credit card bills on time is that your payment history is one major factor that makes up your credit score.

Payment history makes up 35% of your FICO® Score, so making late payments can lower your score. Make sure you stay on top of your payments to avoid negative marks on your credit. You can set up automated payments through your card issuer if you’re forgetful.

Use credit cards to your advantage

Don’t avoid credit cards if you’re in your 20s and want to improve your personal finance skills. Open a credit card, learn how to use it well, and start building your credit. Those with a good credit score are more likely to qualify for better financing options for mortgages, auto, and personal loans, so it pays to care about your credit now. Review our list of the best credit cards to learn more.

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