Credit cards are a great way to start building credit and afford larger expenses, but when you’re not careful, using a credit card incorrectly can damage your credit score and cost you quite a bit of money. Which is why using your credit card the right way is the key to staying out of debt and protecting your credit score. Here are three common credit card mistakes you might be making and how you can avoid them in the future.

Carrying a balance month-to-month

One of the biggest myths about credit is that carrying a monthly balance on your credit card improves your credit score. In reality, carrying a balance month over month actually hurts your credit score and costs you money.

Carrying a balance can get expensive – and this is all thanks to interest charges. Cash-back cards are a great tool to help you save money on everyday expenses, but those savings end up being for nothing if you’re paying a hefty interest payment.

Only making minimum payments

While you should be mindful of making the minimum payment on your credit card each month, it’s not advised to only pay the minimum due. Not paying your bill in full, puts you at risk of falling into debt and racking up unnecessary interest charges. This can add months, and even years to the time it takes you to pay off debt.

Before taking on larger purchases, have a payment plan in place and always make consistent payments toward your balance.

Closing a credit card

One of the factors making up your credit score, is the length of time you’ve had credit. When you close a credit card, this length of history is impacted.

Credit professionals generally advise against closing a credit card – especially if that is your only credit card. However, there are times when it makes perfect sense to close a credit card that charges an annual fee you cannot afford. In which case, the cons have outweighed the benefits of this card.

Dealing with personal debt can sometimes be stressful – especially when it comes to managing your credit cards. Carrying a balance month-to-month, only paying your minimum due and closing an account can potentially prevent you from reaching your financial goals. But it’s not hard to get into the habit of using your credit card correctly. And as a result of this, start saving money while building credit along the way!