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Don’t make these credit card mistakes

Are you guilty of any of these? Here's our top 11 most common credit card mistakes

There are many advantages to having a credit card but when used improperly, you can easily become mired in something very costly that has grown out of your control. Learn about the common mistakes people make and take note of these best practices to get the most from your credit card.

Credit card mistakes & best practices

As useful as credit cards can be, anyone making the following credit card mistakes is going to cost themselves money and may even land themselves in some serious financial difficulties. Pay attention to the best practices to make sure you’re maximizing the benefits of your credit card. These are the 10 worst credit card mistakes you can make:

1. Paying interest.

If you keep an unpaid balance in your card, in other words you spend more than what you can pay off each month, you will be charged interest on your purchases and interest is just money down the drain. Interest compounds and grows quickly, meaning that if you’re not careful it doesn’t take long to get into unmanageable debt with a credit card.

  • How to avoid it?
    Pay off your entire statement balance each month. This way you can enjoy the perks of a credit card without the unnecessary high expense of interest.

2. Making cash-equivalent transactions.

When you take cash out of an ATM or make gambling transactions on your credit card, you will almost always be charged a cash advance fee and interest will accrue at the higher cash advance rate starting from the day you make the transaction.

  • How to avoid it?
    Unless it’s an emergency, don’t use your credit card for cash-equivalent transactions. If it is an emergency and you do need to do so, pay it off as soon as you can to avoid as much of the financial penalty as you can. If you frequently need to take out cash advances, compare cards with low rates, or get a card with a 0% intro cash advance APR.

3. Spending for rewards.

Credit cards entice you to spend more with bonus points and rewards for your spending. It’s tempting to buy things you don’t need or haven’t budgeted for when points are in the picture.

  • How to avoid it?
    Buy what you need and what you’ve budgeted for. If you’re paying more for the card in annual fees than what you’re earning in rewards, consider a card more suited to your budget and spending style.

4. Holding too many credit cards.

This can be an issue if you can’t keep track of your spending and balance payments.

  • How to avoid it?
    Choose which credit card(s) serve you best and cancel the rest. You’ll be able to keep track of your spending and make the most of your cards and related perks. Keep in mind, closing your cards may affect your credit score.

5. Maxing out your credit card.

Spending right up to your credit limit can make you look like a risky borrower and may decrease your creditworthiness and cost you overdraft fees.

  • How to avoid it?
    You don’t have to wait for your statement to arrive to pay off some of your balance. Pay some of it down before you add more charges to keep you from maxing out. But if your credit limit is too low for your income, consider requesting a credit limit increase.

6. Keeping a high-interest debt.

If you’ve racked up credit card debt and are struggling to pay it off, keeping it on a high-interest credit card can cost you an unnecessarily high amount of interest.

7. Not immediately reporting a lost or stolen card.

If you’ve misplaced your credit card or suspect it may have been stolen, it is your responsibility to take action. Not doing so could at best create a major headache, or at worst leave you liable for fraudulent transactions.

  • How to avoid it?
    Even if you find it later in an old jean pocket, it is safer to call your bank and let them know. Sometimes, you can block the credit card without having to completely cancel it.

8. Not checking your statements and recent transactions.

Pay with plastic and you can bury the price and repayment deep in your mind, and adapt a ‘pay now, worry later’ attitude.

  • How to avoid it?
    Most credit cards these days are linked to banking apps accessible on your smartphone. Periodically check your transactions to stay on top of your balance and pick up on any unnecessary or fraudulent transactions.

9. Not reading the fine print.

This can be a terrible mistake. The fine print contains your rewards program, and fees and interest. Missing out on this important info can cost you money.

  • How to avoid it?
    Read through the terms and conditions, check out product reviews or call the bank to ask questions. Make sure you understand what you’re getting, how to get it and what you need to pay.

10. Failing to compare credit card offers

There are hundreds of credit cards on the market and choosing one without doing your research could lead to a rejected application or the acquisition of a credit card that doesn’t suit you.

  • How to avoid it?
    Make sure to consider the annual fee, interest rate, promotional offers, any rewards programs and other perks like travel insurance or purchase protection.

11. Staying with one card for years at a time

Although it may appear more convenient, you could miss out on competitive new offers if you hold on to only 1 credit card for too long. Instead, once you’ve paid off your credit card debt or used the card for a year or so, you may want to start comparing other offers.

  • How to avoid it?
    You can compare offers based on your needs. So if you’re struggling to pay off your debt because of high interest, you might want to move your balance to a card with a low intro APR on balance transfers. If you’re only using your card for emergencies and always pay your balance in full, you could consider a card with $0 annual fee. Or if you have some big ticket purchases to make, you could consider a card with a low or 0% interest rate. Keep in mind, you don’t have to close your old credit card, especially if it has no annual fee. Closing an old account may negatively impact your credit score. Also, try to apply for just 1 credit card at a time and avoid having too many hard inquiries on your credit.

Compare credit cards

Now that you know what mistakes to avoid, you might feel more prepared to get a card or add to the cards you already have. Compare some credit cards to find the best one for you.

Name Product Welcome Offer Rewards Purchase Interest Rate Annual Fee Min. Credit Score Description
RBC Cash Back Mastercard
N/A
Up to 2% cash back
19.99%
$0
Min. recommended credit score: 650
Get 2% cash back on grocery store purchases, and up to 1% cash back on all other qualifying purchases and pre-authorized payments.
BMO CashBack Mastercard
5% cash back
Up to 3% cash back
19.99%
$0
Min. recommended credit score: 660
Get 5% cash back on all eligible purchases in the first three months of card membership (up to max. spend of $2,500). Plus, get a rate of 1.99% on balance transfers with a 1% balance transfer fee for nine months.
Scotiabank Passport Visa Infinite Card
35,000 points
Up to 2 points per $1 spent
19.99%
$139
Min. recommended credit score: 750
Earn up to 35,000 bonus Scene+ points in your first year (that’s up to $350 towards travel). Apply by July 4, 2022.
Tangerine World Mastercard
10% cash back
Up to 2% cash back
19.95%
$0
Min. recommended credit score: 600
Earn an extra 10% cash back (up to $100) on up to $1,000 of everyday purchases in the first 2 months Until May 31, 2022. Plus, get a 1.95% interest rate on balance transfers for the first 6 months (valid within the first 30 days of account opening, 1% transfer fee applies).
Simplii Financial Cash Back Visa Card
10% cash back
Up to 4% cash back
9.99% intro APR for the first 6 months, 19.99% thereafter
$0
Min. recommended credit score: 650
Get 10% bonus cash back at eligible restaurants and bars for the first 4 months (up to $500 spend). Plus, get a 9.99% introductory annual interest rate on purchases for the first 6 months.
RBC Avion Visa Infinite
55,000 points
Up to 1 point per $1 spent
19.99%
$120
Min. recommended credit score: 650
Get up to 55,000 Welcome Points. Get 35,000 points on approval and 20,000 bonus points when you spend $5,000 in your first 6 months. Apply by September 16, 2022.
Scotiabank SCENE Visa Card
5,000 points
Up to 5 points per $1 spent
19.99%
$0
Min. recommended credit score: 660
Earn 5,000 bonus Scene+ points when you spend a minimum of $750 on eligible purchases in the first three months as a new SCENE Visa cardholder. Apply by August 31, 2022.
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Name Product Balance Transfer Rate Balance Transfer Fee Purchase Interest Rate Annual Fee Min. Credit Score Description
BMO CashBack Mastercard
1.99% for the first 9 months (then 22.99%)
1%
19.99%
$0
Min. recommended credit score: 660
Get 5% cash back on all eligible purchases in the first three months of card membership (up to max. spend of $2,500). Plus, get a rate of 1.99% on balance transfers with a 1% balance transfer fee for nine months.
Tangerine World Mastercard
1.95% for the first 6 months (then 19.95%)
3%
19.95%
$0
Min. recommended credit score: 600
Earn an extra 10% cash back (up to $100) on up to $1,000 of everyday purchases in the first 2 months Until May 31, 2022. Plus, get a 1.95% interest rate on balance transfers for the first 6 months (valid within the first 30 days of account opening, 1% transfer fee applies).
Tangerine Money-Back Credit Card
1.95% for the first 6 months (then 19.95%)
3%
19.95%
$0
Min. recommended credit score: 600
Earn an extra 10% cash back (up to $100) on up to $1,000 of everyday purchases in the first 2 months Until May 31, 2022. Plus, get a 1.95% interest rate on balance transfers for the first 6 months (valid within the first 30 days of account opening, 1% transfer fee applies).
BMO Preferred Rate Mastercard
3.99% for the first 9 months (then 12.99%)
1%
12.99%
$20
Min. recommended credit score: 660
Get a rate of 3.99% on balance transfers for 9 months with a 1% transfer fee. Plus, get the $20 annual fee waived in the first year.
BMO Rewards Mastercard
1.99% for the first 9 months (then 22.99%)
1%
19.99%
$0
Min. recommended credit score: 725
Get a bonus of 10,000 BMO Rewards points when you spend $1,000 in the first 3 months. Plus, get a rate of 1.99% on balance transfers for 9 months. A 1% fee applies to transferred balances.
BMO AIR MILES Mastercard
1.99% for the first 9 months (then 22.99%)
1%
19.99%
$0
Min. recommended credit score: 660
Get 800 AIR MILES Bonus Miles (enough for $80 towards purchases with AIR MILES Cash). Get a rate of 1.99% on balance transfers for 9 months. A 1% fee applies to transferred balances.
Scotia Momentum No-Fee Visa Card
0% for the first 6 months (then 22.99%)
N/A
19.99%
$0
Min. recommended credit score: 660
Earn 5% cash back on all purchases for the first 3 months (up to $2,000 in total purchases). Plus, get a 0.00% introductory interest rate on balance transfers for the first 6 months with no balance transfer fee. Apply by August 31, 2022.
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Compare up to 4 providers

Name Product Welcome Offer Rewards Purchase Interest Rate Annual Fee Min. Credit Score Description
Scotiabank Passport Visa Infinite Card
35,000 points
Up to 2 points per $1 spent
19.99%
$139
Min. recommended credit score: 750
Earn up to 35,000 bonus Scene+ points in your first year (that’s up to $350 towards travel). Apply by July 4, 2022.
Scotiabank Gold American Express Card
45,000 points
Up to 5 points per $1 spent
19.99%
$120
Min. recommended credit score: 700
Earn up to 45,000 bonus Scene+ points in your first year (that's up to $450 towards travel). Apply by July 4, 2022.
American Express Cobalt Card
30,000 points
Up to 5x points per $1 spent
20.99%
$155.88
Min. recommended credit score: 700
Earn up to 30,000 Membership Rewards points in your first year. Earn 2,500 Membership Rewards points for each monthly billing period in which you spend $500 in net purchases on your card (up to 30,000 points).
BMO Ascend World Elite Mastercard
60,000 points
Up to 5x points per $1 spent
20.99%
$0 annual fee for the first year ($150 thereafter)
Min. recommended credit score: 760
Get up to 60,000 points and get the $150 annual fee waived in the first year.
BMO eclipse Visa Infinite Privilege
90,000 points
5 points per $1 spent
20.99%
$499
Min. recommended credit score: 760
Get up to 90,000 welcome points in your first year.
Signature RBC Rewards Visa
N/A
1 point per $1 spent
19.99%
$39
Min. recommended credit score: 650
Earn 1 RBC Rewards point for every $1 you spend on qualifying purchases, plus earn bonus points through purchases at select retailers.
American Express Aeroplan Card
50,000 points
Up to 2x points
30% annual interest rate applies to balances not paid in full each month
$120
Min. recommended credit score: 700
Earn up to 50,000 welcome bonus Aeroplan points. New Cardmembers can earn up to $1,100 in value within the first year.
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Compare up to 4 providers

Name Product Welcome Offer Cash Back Rate Purchase Interest Rate Annual Fee Min. Credit Score Reward Description
Neo Financial Mastercard
Get $25.00
Average 5% cash back
19.99% - 24.99%
$0
Min. recommended credit score: 600
RBC Cash Back Mastercard
N/A
Up to 2% cash back
19.99%
$0
Min. recommended credit score: 650
BMO CashBack Mastercard
5% cash back
Up to 3% cash back
19.99%
$0
Min. recommended credit score: 660
Earn 3% cash back on groceries, 1% on recurring bill payments and 0.5% on all other eligible purchases.
Tangerine World Mastercard
10% cash back
Up to 2% cash back
19.95%
$0
Min. recommended credit score: 600
Earn 2% cash back in two categories of your choice (or three categories if you open a Tangerine Savings Account and directly deposit your cash back into the account), and 0.5% cash back on everything else.
Simplii Financial Cash Back Visa Card
10% cash back
Up to 4% cash back
9.99% intro APR for the first 6 months, 19.99% thereafter
$0
Min. recommended credit score: 650
Earn 10% cash back on dining experiences when you spend up to $500 in your first 4 months.
Tangerine Money-Back Credit Card
10% cash back
Up to 2% cash back
19.95%
$0
Min. recommended credit score: 600
Earn 2% cash back in two categories of your choice (or three categories if you open a Tangerine Savings Account and directly deposit your cash back into the account), and 0.5% cash back on everything else.
Neo Secured Card
15% cash back
5% cash back
19.99%
$0
Min. recommended credit score: 600
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Compare up to 4 providers

Name Product Welcome Offer Rewards Purchase Interest Rate Annual Fee Min. Credit Score Description
RBC Cash Back Mastercard
N/A
Up to 2% cash back
19.99%
$0
Min. recommended credit score: 650
Get 2% cash back on grocery store purchases, and up to 1% cash back on all other qualifying purchases and pre-authorized payments.
BMO CashBack Mastercard
5% cash back
Up to 3% cash back
19.99%
$0
Min. recommended credit score: 660
Get 5% cash back on all eligible purchases in the first three months of card membership (up to max. spend of $2,500). Plus, get a rate of 1.99% on balance transfers with a 1% balance transfer fee for nine months.
Tangerine World Mastercard
10% cash back
Up to 2% cash back
19.95%
$0
Min. recommended credit score: 600
Earn an extra 10% cash back (up to $100) on up to $1,000 of everyday purchases in the first 2 months Until May 31, 2022. Plus, get a 1.95% interest rate on balance transfers for the first 6 months (valid within the first 30 days of account opening, 1% transfer fee applies).
Simplii Financial Cash Back Visa Card
10% cash back
Up to 4% cash back
9.99% intro APR for the first 6 months, 19.99% thereafter
$0
Min. recommended credit score: 650
Get 10% bonus cash back at eligible restaurants and bars for the first 4 months (up to $500 spend). Plus, get a 9.99% introductory annual interest rate on purchases for the first 6 months.
Scotiabank SCENE Visa Card
5,000 points
Up to 5 points per $1 spent
19.99%
$0
Min. recommended credit score: 660
Earn 5,000 bonus Scene+ points when you spend a minimum of $750 on eligible purchases in the first three months as a new SCENE Visa cardholder. Apply by August 31, 2022.
Neo Secured Card
15% cash back
5% cash back
19.99%
$0
Min. recommended credit score: 600
Earn bonuses like 15% cashback on your first purchase at most partners, and earn an average of 5% cashback at thousands of partners and at least 1% cashback guaranteed.
OFFER
Tangerine Money-Back Credit Card
10% cash back
Up to 2% cash back
19.95%
$0
Min. recommended credit score: 600
Earn an extra 10% cash back (up to $100) on up to $1,000 of everyday purchases in the first 2 months Until May 31, 2022. Plus, get a 1.95% interest rate on balance transfers for the first 6 months (valid within the first 30 days of account opening, 1% transfer fee applies).
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1 - 3 of 3
Name Product Purchase Interest Rate Cash Advance Rate Annual Fee Minimum Income Reward
BMO Preferred Rate Mastercard
12.99%
15.99%
$20
$15,000
Take advantage of an introductory balance transfer offer, annual fee waiver in the first year, and low purchase and cash advance interest rates.
Get a rate of 3.99% on balance transfers for 9 months with a 1% transfer fee. Plus, get the $20 annual fee waived in the first year.
Scotiabank Value Visa Card
12.99%
12.99%
$29
$12,000
Save on interest for 6 months by consolidating your higher-rate balances with the balance transfer offer, and get an on-going 12.99% interest rate on purchases, cash advances and balance transfers.
Get a 0.00% introductory interest rate on Cash Advances for the first 6 months. Plus, pay no annual fee in the first year. Apply by August 31, 2022.
National Bank Syncro Mastercard
8.90% or prime + 4.00%
12.90% or prime + 4.00%
$35
N/A
Enjoy low purchase interest, cash advance and balance transfer rates.
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Bottom line

Not being aware of the worst credit card mistakes can cost you money. Make sure you keep an eye on these mistakes and use the best practices to stay on top of your credit card game. And if you still haven’t found the right credit card, compare multiple options until you do.

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