Eight in ten credit card users admit to making common mistakes, according to new research from Compare the Market. The research found that withdrawing cash using a credit card , only making the minimum repayments and getting close to or reaching your credit limit are the most common credit card mistakes.
Other common mistakes include not keeping an eye on your credit score and applying for multiple credit cards at once . Applying for multiple credit cards at the same time could lower a borrower’s credit score as they will appear to be a greater risk to lenders. Almost half of borrowers also didn’t compare providers online when they took out their credit card which may mean they aren’t receiving the best rates or rewards for their circumstances.
The research also found that 27% of credit card users admit they have been late making repayments, as 45% have outstanding credit card debt. This additional debt could be concerning, as 70% of borrowers admit they don’t know the interest rate charged by their credit card. Almost a quarter of borrowers also state that they are using more than half of their existing credit limit. Consistently using a large proportion of available credit can reduce a borrower’s credit score.