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Applying for a new credit card can be very tempting. However, when choosing your credit card, it is important that you find the one that is most appropriate for you. If you don’t do your homework, you may end up paying more than you bargained for.

Here are six common mistakes people make when choosing a credit card.

1. Choosing a Card for the Wrong Reasons

Even though the attractive rewards and points on department store credit cards can sound appealing, they often carry higher interest rates than standard credit cards. Credit cards aren’t meant to be an impulse decision. If you hear about a great deal that comes along with opening a new card, you may want to consider going home and researching the card. Stores may be willing to give you a 10% discount when you sign up, but it may end up costing you loads in interest charges in the long run if you carry a balance on that card.

2. Not Reading Terms & Conditions

It is very important to read all of the fine print before opening up a new credit card. You want to make sure you are aware of all introductory rates, annual fees, balance transfer fees, overseas transaction fees, details of any 0% APR introductory offers as well as anything else that may affect your credit card usage.

3. Not Interest Rate Shopping

Consider looking for the best possible interest rate when shopping for a new credit card. You don’t want to get stuck with a high-interest credit card, especially if you are struggling financially. The best way to ensure you are approved for a low-interest credit card is to make sure your credit is in good shape. You can check your credit scores for free every month on Credit.com and monitor your progress as you build credit.

4. Only Paying the Minimum Balance

One of the best strategies to obtain a good credit history is to pay off your credit card’s statement balance in full at the end of each payment cycle. If you can only pay the minimum balance when it is due, you may want to consider making an additional payment every month, even if you can’t afford to pay the entire balance. This is so you can get your balance at the lowest it can possibly be at the end of each payment cycle.

Sometimes life can throw you unexpected expenses. If you find yourself only able to pay the minimum, then you will end up paying more in interest. If you are struggling to pay off your credit card each month, consider talking to a financial planner or adviser to help you figure out a plan.

5. Exceeding the Limit

Try your best to never get close to the limit of your credit card or go over. Depending on your credit card, you may get charged a large fee if you exceed the limit. This also is risky because it can lead you into credit card debt and hurt your credit scores. Always check your statement to see if you are getting close to your maximum balance. If you are near the top of your credit card limit, consider paying off as much as you can to lower the balance. A credit utilization (aka your balance vs. your limit) over 30% on a credit card can hurt your credit scores. Consumers with the best credit scores keep their spending to less than 10% of their credit limits.

6. Ignoring Your Monthly Statement

Try to always look at your monthly statement when it arrives. This will help you avoid late payments, know what your balance is and even prevent yourself from becoming a victim of fraud. Make sure everything is correct on your statement. If you see a charge that isn’t supposed to be there, then you should act quickly by calling your credit card company to fix the problem.

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