Credit cards are useful when you do not have any cash on hand. But with this convenience comes a responsibility.

Many have fallen into the trap of spending too much, only to find they do not have the means to pay off their credit card bills.

Here are some of the common mistakes you should avoid if you own a credit card.

1. Only paying the minimum

When the credit card bill arrives every month, you can either pay in full or just the minimum amount. Paying only the minimum means there will be an outstanding balance, which will incur financial charges that will accumulate over time.

If you can only pay the minimum, make sure you make payment before the due date. But it is always best to pay in full if you can.

2. Missing a payment

This is the mistake banks hope you make. If you miss a payment, you will likely be charged a late fee. This is usually a percentage of that month’s bill.

Forgetting to make payment can be avoided by creating a recurring reminder each month. Some banks offer auto payment services.

If there are circumstances which prevent you from making payment, consult the bank or a financial planner on how to move forward.

3. Not knowing the terms and conditions

It is a mistake to assume that all credit cards have the same terms and conditions. Different cards have different usages and are issued by different banks, thus they will have their unique sets of terms and fees.

You do not want to accrue hidden fees that later get charged to your bill. Always read the terms in full, and consult with the bank on anything you are unsure of.

4. Paying for a card you don’t use

Having a collection of credit cards, including supplementary cards, is a common practice, but having multiple cards can mean fees and service tax charges to maintain them.

It can also be inconvenient to have too many cards to carry around, while spreading around your expenses between multiple cards makes it difficult to control your spending.

It would be better to consolidate and keep only those that are useful to you and your household.

5. Not reporting a lost card

If you lose a credit card, or if it is stolen, immediately call the bank and stop all future transactions. Identity theft, exposed bank account details, or even robbery can be prevented by reporting it as soon as possible.

Any fees that come with replacing a lost credit card are small compared to being the target of criminal activity.

6. Chasing for rewards or not redeeming them

The rewards you earn from using your credit card can come in the form of points or rebates. Some cards offer additional services at a reduced fee. This is to tempt you into using your card more and more.

Choose the card that suits your lifestyle and offers the convenience of earning rewards with normal spending. Think of how that card will help you in the long run instead of chasing for the rewards it offers.

Remember to redeem these rewards before their expiry dates.

7. Not reviewing your statement

Review your credit card statement for accuracy and details to prevent fraudulent transactions or wrongful charges. Both of these need to be noticed and reported in a timely manner.

A statement also contains information that is useful for tracking your spending. Crosscheck your statement with your expense data for better budget management.

This article first appeared in MyPF. Follow MyPF to simplify and grow your personal finances on Facebook and Instagram.