Credit cards allow users to build credit and handle unexpected expenses with ease, but poor spending habits can lead to financial issues. According to the team at Mohave Community Federal Credit Union in Kingman, AZ, opening a new credit account can be beneficial as long as you follow the industry's best practices. Below, the credit union outlines three common mistakes that credit card users often make.

3 Common Credit Card Mistakes to Avoid

1. Only Paying the Minimum Payment Each Month

Just because you only have to pay the minimum amount doesn't mean that you shouldn't pay more. Any balance that's left on the card after your payment accrues interest, so your overall balance will continue to grow and eat away your budget. Fortunately, you can avoid wasting money by paying off the full amount after each statement. This process also saves you money in the long run.

2. Charging Up to Your Limit

When it comes to your debt-to-income ratio, the sweet spot is 30%. Anything over this amount will negatively affect your credit rating, so it's important to keep your balance low. Unless it's a big purchase that you already have the funds for in your savings account, avoid reaching your card's limit. If an emergency does arise, consider applying for a personal loan through your credit union to score better interest rates.

3. Apply for Multiple Cards

Applying for more than two or three cards within a year may hurt your chances for home and car loans. Such a situation is viewed by credit unions and banks as potential risky behavior, so only apply for one card option at a time. If you're looking to build your credit, do your research first so that you can apply for the card option that best matches your circumstances. It's also better to utilize a general card type that's usable everywhere instead of multiple store-specific options.

Credit cards offer an extra layer of security, but it's important that users follow financial best practices with their spending and payment habits. If you're looking for a card that suits your needs, turn to Mohave Community Federal Credit Union. For more than 60 years, the credit union has successfully assisted the financial needs of residents and businesses throughout Mohave County. From savings accounts to home loans, they offer a variety of services and products. Learn more about their credit card options online or by calling (928) 753-8000.