![]() ![]() The other major credit blunder consumers make involves maxing out their cards, with 48% of those surveyed doing so. “Once that is disrupted, the consequences are massive,” he adds. That’s because nothing matters more to your credit than your track record of paying on time. “A single payment that is 30 days or more late can devastate your credit, making your score fall 50 to 100 points, depending on your individual circumstances,” says Schulz. Just about half (49%) of consumers say they have paid a credit card bill late at least once. Worse than paying interest on small balances, however, are the two major things that many Americans have done that actually hurts their credit score: paying a credit card bill late and maxing out their credit cards. Schulz suggests putting a small recurring bill on a card you don’t use much, and paying it off in full each month. However, according to Schulz, you do not need to carry a balance on a card in order to keep it from being closed - you just have to use it periodically. “It is definitely true that a dormant or little-used card might be at risk of being closed by its issuer,” says Schulz, and it happened even more so during the early days of the pandemic. Though Schulz isn’t exactly sure where this myth comes from, he thinks perhaps it could be confusion with the idea that you need to keep a card active in order to keep it from being closed. It’s especially concerning for the youngest generation who could end up carrying a balance for several decades. If they’re only carrying a small balance, it may not cost them a huge amount of money, but over time, it adds up,” he says. “The myth hurts cardholders because it costs them money. But it’s simply not accurate, says Schulz. For the youngest consumers, Gen Z, the percentage is 79%. The myth that keeping a small balance on your cards is actually good for your credit score is pervasive - with just about two out of three Americans believing it. Specifically, more than half (55%) of card-carrying consumers are missing out on credit card rewards by paying with cards that don’t provide points or cash back, despite the majority (85%) of cardholders having at least one rewards card.Ħ5% think carrying a balance helps their score, and that’s not the only credit card mistake consumers are making Credit cards can provide many benefits - but many aren’t taking advantage of them.Men are 27% more likely to pay their credit card balance in full each month (57% versus 45% of women), while women are more likely to have made a late payment (54% versus 44% of men). Women struggle more to pay their credit card bills in full and on time.While that’s not an issue for those who pay their bill in full each month, it’s worth looking into for the 49% of cardholders who generally carry a balance. More than a third (35%) of cardholders don’t know their credit card’s interest rate.Both of these behaviors put Americans at risk of missing discrepancies with their score or transactions. In addition, 1 in 4 credit cardholders also don’t review their card statements every month. More than half of consumers (55%) haven’t checked their credit score in over a month.In reality, this likely means consumers are paying extra interest when they don’t have to. The number is even higher ( 79%) among Gen Z. Nearly two-thirds (65%) of Americans believe this costly credit card myth: that carrying a small balance on their credit card each month will improve their credit score.More than half check don’t credit scores monthly.65% think carrying a balance helps their credit score. ![]()
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