A credit card is a big responsibility. Use it the right way and it can benefit you. But use it the wrong way and it can soon take a toll on your financial well-being.

One of the biggest concerns among credit card users is making a mistake that will harm their credit score. For this reason, it’s imperative that you know what you should and shouldn’t do at all times.

Here are three mistakes you never want to make:

1. Making a Late Payment

Your payment due date is clearly stated on your credit card statement. Do whatever it takes to make the minimum payment, if not more, by this date.

A missed payment won’t kill your credit score right away, but if it drags out to 30 days late it’s time to worry.

Tip: setup an automatic payment so you never have to worry about manually paying your credit card bill. 

2. Maxing Out Your Credit Card

Your credit to debt ratio will take a big hit if you max out your credit card. So, before you talk yourself into thinking it’s okay to do this, think twice.

If you don’t have the money to pay your credit card bill in full – or close to it – take a step back and think about what you’re doing. 

Maxing out one or more credit card is a bad idea – and not just because it has the potential to harm your credit score. It also means that you can’t use your credit card, until you pay down your balance.  

Tip: know your credit card limit so you can easily calculate your credit to debt ratio. 

3. Closing Your Credit Card Account

This isn’t always a mistake, but it’s something you must strongly consider before taking action.

When you close a credit card account, you reduce the amount of credit that’s available to you. And that can have an impact on your credit score.

However, this doesn’t mean you should leave a credit card account open if you’re not comfortable doing so.

For example, if you’ve abused your account in the past, closing it may be the only way to ensure that you don’t go down this path in the future. 

Tip: if your credit card has an annual fee, keeping your account open will cost you money every month (for nothing in return).

Final Thoughts

Your credit score is important to your overall financial health. Don’t do anything that will drag it down and cause you stress in the future.

With a sound understanding of the above mistakes, it’s easier to formulate a strategy for avoiding them.

Have you made one or more of these mistakes in the past? How are you protecting against them in the future?