The 10 Worst Credit Card Mistakes

If you can avoid these classic errors, you'll be able to use your plastic wisely.

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There are plenty debates over whether or not you should use a credit card, especially if you are in debt. If you have a credit card, you want to be sure you are using it to your advantage and avoid costly mistakes. To help you avoid these mistakes, here is a list of the ten biggest credit card mistakes that people make.

[In Pictures: Top 10 Cities with the Most Debt]

1. Using your credit card like a debit card

Your credit card is not your bank debit card. Never put your credit card into an ATM. No, it’s not going to do any damage to your credit card, but it will cost you. Often you can expect a flat fee for getting a cash advance and also an astronomical interest rate on top of that for the convenience.

2. Signing up for a credit card with an annual fee and not setting a reminder in your calendar

It is sometimes a good idea to sign up for a new credit card to get a big sign up bonus or take advantage of a balance transfer offer. However, if you ended up with a card that has an annual fee, be sure to set a reminder in your calendar if you are not planning to keep the card and want to avoid the fee. Far too many people pay annual fees on credit cards just because they forget to cancel the card.

3. Not properly researching foreign transactions fees

Before traveling overseas, you need to realize that every credit card has different foreign currency exchange rates and international transaction fees. A typical fee is anywhere from 0 percent to 3 percent. If you have several cards in your wallet, you should use the one that has the best foreign currency exchange rate.

4. Lending your card or card number to people

This is a recipe for disaster. If you give someone your card number, they can make an exorbitant number of purchases. Protect your account by refusing to give anyone your card or card number.

5. Spending more on your card than you have in the bank

Credit card debt is one of the most costly types of debt. In fact, it is the reason why so many people face huge financial problems. If you have a card, you need to be sure that you have a system in place to limit or monitor your spending. You need to know how to budget with your card, and if you don’t do it well, you need to immediately address your credit card debt problems.

6. Giving anyone other than your spouse signing rights

If you get a secondary card for someone, you are liable for all the charges. If you’re married, you’re already liable because you own everything jointly. Otherwise, you are taking a serious risk by adding other card members. The only possible exception might be your children, and if they do have an account you should properly monitor their spending and their credit limit.

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7. Not calling to ask to reduce your APR

If you currently are trying to get out of credit card debt then you should call your card issuer and ask them for a reduced rate. Just gather a few offers for lower rates you have in your mailbox and threaten to leave if they don’t lower your rate. If they don’t budge, move your balance elsewhere.

8. Signing up for a credit card to get a free T-shirt or a 10 percent discount on a $20 shirt

There can be some very lucrative sign up bonuses. Your best bet is to only sign up for cards with really good offers. A free T-shirt and a 10 percent off are not good incentives.

9. Not properly managing your statement and payments

Some people get into credit card trouble simply because they don’t review their statements and they don’t have a system in place for paying their bills. You need a system. If you are not in a habit of reviewing your statement, it is quite likely that you are making some reoccurring payments you know nothing about.

10. Not taking advantage of credit card rewards

I figure if you have a credit card you might as well be getting rewards. There is no such thing as the right card because the right card depends on your spending habits. Just be sure your spending is offering you something of value. Here’s a list of the best credit cards to help you make that decision.

Pinyo is the owner of Moolanomy Personal Finance Blog, which covers a wide range of personal finance  and investing topics, with features that include reviews, comparison guides, and Q&A sections.