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Credit cards can be a great asset or a great liability, depending on how a cardholder uses them. And, as we approach the holiday season, you should consider your financial goals before you get wrapped up in holiday spending. These 7  credit card mistakes can certainly cause pain to your pocketbook and damage your credit score:

1. Too Close To Credit Limits:  Just because your issuer awarded you a $6,000 credit limit doesn’t mean you should max out the card. Bumping up against your credit limit is likely to have a negative overall impact on your credit score. “The closer you get to your credit limit, the riskier your credit profile is going to look,” says Chris Mettler, founder of CompareCards.com, since it leads to a high credit-to-debt utilization ratio.
2. Check Your Credit Score: You might assume your credit score is in fine standing based upon a presumably stellar payment history, but the truth of the matter is that credit reports can easily contain errors.
3. Applying For Too Much Credit: Too many credit card inquiries – generated by lenders who are looking to see if you deserve a new line of credit – in a short timeframe can also negatively impact your credit score. Instead, apply for credit as you need it and add a new card to your payment arsenal about once a year until you’ve got three or four you can consistently pay off on time at your disposal.
4. Taking Out Cash Advances:  Just don’t do it. “You’re going to be charged a significant amount of interest,” Mettler says, estimating that most transactions will carry an interest rate around 23% or higher. As such, it’s best to use a credit card only in instances where the plastic itself can be used to make the purchase and you can pay back the funds by the subsequent bill’s due date.
5. Applying for a Card That Has Special Perks:  Before selecting a card that promised rebates, cashback and points, be sure to determine if the credit card fits your lifestyle. These special perks usually come with fees and higher interest on unpaid balances. There may be a great rewards card with no annual fee that serves your purposes just fine.
6. Closing All Your Credit Card Accounts:  Although it might seem like a good idea to rid yourself of all credit cards, it can negatively affect your credit score. Rather, keep the credit accounts open, but not use them. This will help keep your credit-to-debt ratio positively intact and not jeopardize the average age of your credit report.
7. Not checking your monthly statement:  It can be easy to set up automatic bill pay on your account and then forget all about your credit card, especially in instances where you use it infrequently. You could be paying for things that you forgot you signed up for. life_guide_retirementOr, worse yet, you could be paying for identity theft.

Sources: MainSt.com : The 7 Deadly Credit Card Sins

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