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- Millions of Americans Are Misusing Their Credit Cards</p>
<p>David BerenJuly 18, 2025 at 10:41 AM</p>
<p>When you think about credit card use, there is almost always something that people may not understand that can land them in trouble. Whether it's a misunderstanding about how the annual percentage rate works or how cash advance fees are charged, there is always the chance for something to go wrong.</p>
<p>Key Points -</p>
<p>The notion that credit cards are the primary problem is entirely false.</p>
<p>No question, overspending with credit cards is primarily due to a lack of financial control.</p>
<p>It's up to you to remember that there are plenty of credit card myths that are simply untrue.</p>
<p>It's hard to believe, but today there are credit cards offering up to 6% cash back, $200 statement credits, $0 annual fees, travel rewards, and more. See for yourself, I couldn't believe it at first. Frankly, with rewards this good we don't expect them to be available forever. But if you sign up today you can secure some of the best rewards we've ever seen. Click here to get started.</p>
<p>The good news is that credit card terms and policies are not overly complicated to read and follow. The challenge is that most people either ignore them entirely or believe the myths surrounding credit card use, which makes us the problem, not the credit cards themselves.</p>
<p>Using Credit Cards Responsibly</p>
<p>At the end of the day, it's up to you, as the user, to make sure the credit cards in your wallet are being used responsibly. The credit card company is definitely not going to stand in your way if you want to overspend, accrue interest, and only make the minimum payment. The onus is entirely on the credit card holder to practice good habits.</p>
<p>Paying The Full Balance</p>
<p>It should go without saying, but if you are able, paying off your balance every month is the single best thing you can do with a credit card. Not only does this help your credit score, but it also means you are avoiding interest entirely. Whether you set up autopay or remember to pay each month is entirely up to the cardholder, but autopay is a great way to ensure the full balance is paid on time, every month, like clockwork. The alternative is to make the minimum or only a partial payment of the full balance, which means prolonged debt and high interest costs. Rest assured that interest costs can quickly add up to hundreds if not thousands of dollars over time. This could have a dramatic impact on the rest of your financial life, so sticking with a mindset of only purchasing what you can pay off every month is the best course of action.</p>
<p>Understanding Credit Utilization</p>
<p>Consider this a quick reminder that the best course of action is to keep your credit utilization below 30% of any available credit limit. This means that if you have a credit limit of $1,000 on a card, you shouldn't carry more than 30% or $300 over each month.</p>
<p>Better yet, if you want to really help your credit score, don't carry more than 10% of your credit line month to month. As long as you are paying your balances on time, your credit utilization score is lowered, and this is what gets reported to the credit bureaus. Note that this is true whether you have one credit card or seven, as the same rules apply.</p>
<p>Avoid Unnecessary Fees</p>
<p>If you are concerned about the fees associated with credit card use, the reality is that they are relatively easy to avoid if you are careful. Whether it's a late payment fee, cash advance, or a foreign transaction fee, picking the right card matters. If you want to avoid a late payment fee, for example, set up autopay so you don't have to worry about missing a payment.</p>
<p>Separately, research the right credit card for you to avoid foreign transaction fees. For example, the Fidelity Visa Card, which offers 2% cash back on every purchase, has no foreign transaction fee for cardholders, making it an ideal choice for those who travel internationally regularly.</p>
<p>Leverage Reward Programs</p>
<p>One of the best aspects of credit card use today is the reward programs being offered. Whether it's cash back like the Fidelity card mentioned above, or miles you can earn with cards from Capital One Venture, where you can earn miles with every purchase. Similarly, if you book travel with Capital One, you can earn as many as 10X miles for every dollar spent, depending on the card you choose.</p>
<p>There is no question, especially with travel cards, that you can gain significant benefits from their use. Of course, this means you do have to spend money every month to accrue enough rewards for a free room or flight, but still, if you are able to take advantage, it's a great way to benefit from the cards you already own when you use them responsibly.</p>
<p>Common Financial MisstepsDon't Ignore Your Budget</p>
<p>Whether you want to avoid fees or increase your credit utilization score, the single most important reminder for credit card use is to not ignore your budget. Doing so almost guarantees that you will overspend, which can result in potential late fees, missed payments, or making the minimum payment and letting interest accrue unnecessarily.</p>
<p>Use Only for Emergencies</p>
<p>Set up a budget that aligns with your financial goals, and if necessary, use your credit cards only for emergencies. If you rely on your credit cards for every purchase, it's a quick and easy way to dig yourself into a hole, unless you are positive you can pay the full balance every month. A good idea is to track your spending using a spreadsheet in Google Sheets or Excel, allowing you to see how you spend every month visually.</p>
<p>Debunking Credit Card Myths</p>
<p>The sheer volume of credit cards available and the amount of information surrounding them have undoubtedly led to some credit card myths that need to be dispelled.</p>
<p>Credit Cards Lead to Debt</p>
<p>While the myth that credit cards always lead to debt isn't entirely untrue, it's not a guaranteed outcome either. The idea is that many people are concerned about being trapped with high-interest credit cards and the ease with which one can overspend. The reality, again, is that debt becomes an issue only when it is not used responsibly. If you treat a credit card like a loan instead of something you need to pay off, this myth is very much a reality.</p>
<p>Credit Card Rewards Are a Scam</p>
<p>There is no question that credit card banks and companies want to offer you enticing rewards so you use your card more. However, the idea that rewards are a scam is, for the most part, false. There are some loopholes to consider, such as blackout dates with travel rewards, but this doesn't make them a scam. Instead, you just need to read the fine print.</p>
<p>Cash Is Better than Credit</p>
<p>The whole idea that "cash is king" is no longer true, and likely hasn't been true for the better part of a few decades. If your cash is stolen out of your wallet, it's likely gone forever. However, if someone steals your credit card or credit card number, there are built-in fraud protections on the card. In most cases, as long as the fraud is reported right away, you won't be responsible for any charges. Budgeting with a credit card is also easier, as it's more likely you will forget to account for spending with cash.</p>
<p>Credit Cards Encourage Overspending</p>
<p>This is a common misconception, as overspending with a credit card is largely a matter of personal responsibility. You can have five credit cards in your wallet and never use them, so it's not the card that encourages overspending. The key is to have a budget and to remind yourself that you can't spend frivolously, as you will eventually have to pay for it.</p>
<p>Being able to track your credit card balance, as opposed to just spending cash, also makes it easy to visualize exactly how much you have spent and whether your spending is suddenly getting out of control.</p>
<p>Today's Top Rated Credit Cards Are Hard to Believe (sponsor)</p>
<p>It's hard to believe, but today there are credit cards offering up to 5% cash back (you read that right) on some items, $200 statement credits, $0 annual fees, travel rewards, and more. See for yourself, we've assembled a list of the top credit cards today right here.</p>
<p>Frankly, with rewards this good we don't expect them to be available forever. But if you sign up today you can secure some of the best rewards we've ever seen. Click here to get started.</p>
<p>The post Millions of Americans Are Misusing Their Credit Cards appeared first on 24/7 Wall St..</p>
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