What are the mistakes you could make with your credit card that potentially increase your risk of bad credit history?  We look at the advice for credit cards that could save your credit rating.

By Graham Doessel, Founder and CEO of MyCRA Credit Rating Repairs and www.fixmybadcredit.com.au.

Savings Guide Australia featured a great article on the 7 Classic Credit Card Mistakes. It reports on info from MSN Money on the Seven Deadly Sins of Credit Card Use. They provide some useful information on the right way to think to avoid credit card mistakes that could hinder your credit report.

Some really important points from this SavingsGuide.com.au article are:

Don’t max out the credit card…

“Consistently nudging your limit at the end of the month is a sign you should be reconsidering your usage and budgeting to allow more financial space for saving.”

Be wary of unnecessarily high credit limits…

“It doesn’t even matter whether or not your card is maxed out, when applying for a loan, your credit limit becomes important. If it’s high, it can undermine your approval opportunities.”

Avoid Cash Advances…

“The price is high; huge interest calculated from the day you borrow, making it very difficult to get on top of your credit card repayments. Avoid at all costs.”

Here are some more ideas to prevent your credit card use from leading to a bad credit rating from my post on How to avoid bad credit history from credit card debt:

Create your own credit limit.
Set yourself a limit based on what you can comfortably afford to repay. It’s important to realise that you will pay at some point for the credit you use. Make sure at worst case scenario you can afford to repay it. You will then have confidence in your spending without the temptation to overspend.

Don’t exceed the credit limit.
This will just mean you incur hefty charges.

Pay off the balance each month.
Ideally, pay off the entire card balance within the interest free period. If you don’t, you will be charged interest right back to the date you purchased each item. You not only lose the interest-free period on those past purchases, but until you pay off the balance there will be no interest free period on anything you spend in the future.

Or, choose a low interest card, but still pay more than the minimum repayment amount each month.
If you have debt which carries over on your card month to month you should look at a card that has a lower interest rate. It may not offer an interest free period, or hefty rewards points, but the lower interest rate should mean the carried over debt is more manageable for you, and will prevent possible bad credit history.

If you want to see what is said about you on your credit report, you can do this for free every 12 months from Australia’s credit reporting agencies. For help with getting a copy of your yearly free credit report, you can contact MyCRA.

We may also be able to help repair your bad credit history, or give you more information on your credit rating. Visit our website www.mycra.com.au or call MyCRA Credit Rating Repairs tollfree on 1300 667 218 for more details.