Credit cards have become a way of life for many because they allow the freedom of purchasing power on credit. This way, consumers get what they want when they want it provided there is available credit. The buy now and pay later option is attractive to many who are trying to break out of the paycheck to paycheck routine. With the advantages that come with ownership of a credit card, there are also common mistakes made on the part of the consumer. Five of the most typical and most costly credit card mistakes are ignoring the credit card statement, not paying the bill on time, exceeding credit limits, having too many credit cards, and lastly making minimum payments only.

We have almost all been in a situation where the mail comes in and sits on the counter or some other place for a few days or more before being looked at. When a credit card statement is received, it should be opened and reviewed right away. This will allow assurance that the charges and credits on the statement are correct. With the increase in ID theft, this is critical to ensuring the maintenance of a good credit rating. Having peace of mind that you are not being charged for something you did not buy is a good feeling.

Not paying a bill on time is never a good thing, and should be avoided at all cost. Late payments can be costly in that you will be assessed higher finance charges, and if the pattern continues, credit availability may be reduced or cut off. Additionally, more will be paid in finance charges and late fees when the payment is received late.

If spending habits are not monitored correctly, it can be very easy to run up a balance and exceed available credit limits. Some cards are designed to prevent this, but many are still able to surpass set limits resulting in higher fees for the consumer. Maintaining a high balance also may affect your available credit limits. Keep tabs on what you are spending and what you are paying. Try and pay cash if you have the means. It can save you money in the long run.

Another common problem is having too many credit cards. I have known some people that carry as many as 8 at one time, all with maxed limits. The convenience of credit makes it easy to accept additional cards so that the feel good feeling of being able to purchase things stays in tact. However, be aware the more cards you own and use, the longer you are going to remain in debt. Try to limit yourself to just 1 type of card if possible. When needed, then 2 and no more than 3 would be acceptable. A Visa, MasterCard and one alternate card would be a good combination.

The most common and probably the most costly mistake made by credit card consumers are making only minimum payments. This can cause many problems such as excessive debt, reduced credit availability, and a never ending vicious circle of collection attempts. To keep yourself and your credit score in check, work at avoiding these common mistakes, and make corrections when necessary.

If your situation is already out of control, get help before it becomes too much to deal with. There are many consumer credit counseling services that offer classes for newly credited or credit challenged individuals. Check your local Yellow Pages for details.