Credit cards can be a blessing or a curse depending on how you use them - here are 5 lessons you don't want to learn the hard way

Crystal Cox/Business Insider

• Credit cards can be a blessing for your finances, but they can also be the cause of financial struggle, stress, and even bankruptcy. The outcome of your credit use ultimately depends on whether you use credit responsibly.
• There are many credit card lessons you don't want to learn the hard way, but most of the biggest problems can be avoided if you only charge purchases you can afford to pay off.
• Paying your credit card bill late can be a death knell for your credit score, even if you only make this mistake a few times. Keep in mind that your payment history is the most important factor that makes up your credit score, and act accordingly.
• See Business Insider's list of the best rewards credit cards »

Credit cards can be a blessing or a curse - it all depends on how you use them. If you're using credit in order to earn rewards or gain important consumer protections but you always pay your bill in full, then credit cards can easily leave you "ahead."

But someone has to pay for all the lucrative rewards the rest of us earn, and they pay out the nose thanks to credit card interest rates that are often sky-high.

Will you be on the winning end of credit, or the losing end? It's really up to you, although there are definitely situations where your finances spin out of control whether you want them to or not. Either way, credit cards really can teach some life-altering lessons, including some that hurt your pride more than your pocketbook.

Here are some of the most common credit card lessons you should really try to avoid.

Keep in mind that we're focusing on the rewards and perks that make these credit cards great options, not things like interest rates and late fees, which will far outweigh the value of any points or miles. It's important to practice financial discipline when using credit cards by paying your balances in full each month, making payments on time, and only spending what you can afford to pay back.

1. Don't miss out on a big sign-up bonus

Many of the top rewards cards and travel credit cards offer big initial bonuses for consumers who can meet a minimum spending requirement within a few months. For example, the Chase Sapphire Preferred Card gives you 60,000 points (worth $750 in travel booked through Chase) after you spend $4,000 within three months of account opening. This is an exceptional rate of return if you were going to spend that amount of money anyway, which is highly possible if you typically use your credit card for groceries, gas, and regular bills.

But the devil is in the details of these offers, and they don't leave any room for error at all. You must meet the minimum spending requirement within three months of the day you open your account - not the day you receive your card. If you're even a day late, you'll miss out on the bonus and there will be nothing you can do.

Trust us when we say that you don't want to learn this lesson the hard way. Make sure to plan your spending so you're hitting the minimum spending requirement early on.

Earn 60,000 points: Click here to learn more about the Chase Sapphire Preferred »

2. It's not worth overspending to earn rewards

Another mistake many people make is overspending to earn rewards. It's easy to covet a big sign-up bonus or the ongoing rewards you can rack up on a big purchase - only to wind up with a balance you can't actually afford to repay.

What happens then? All of a sudden, you're paying 17% APR or more for purchases when you only earn 1% to 3% back in rewards to begin with.

Overspending to earn more rewards is bad math that never, ever works out in your favor. You should only pursue credit card rewards and sign-up bonuses if you know for sure you can pay your balance off in full - and if you're making purchases you planned to make anyway.

Read more: The best credit cards with intro APR offers

3. Remember to take annual fees into account

Many of the top travel credit cards charge annual fees to account for exceptional travel benefits like airport lounge access, Global Entry or TSA PreCheck application fee credits, annual travel credits, and more. However, these fees can easily add up fast if you're not careful - especially since cards like the Chase Sapphire Reserve and the Platinum Card® from American Express charge $550 annual fees.

At the end of the day, you should only pay an annual fee on a credit card if you know for sure you're getting more value in return. If you're paying fees without taking advantage of cardholder perks or earning any rewards, you're not doing yourself any favors.

4. Don't forget to use important credit card perks

Speaking of cardholder perks, there's nothing wrong with paying a credit card's annual fee to access them. However, you should make sure you're using card perks if you hope to get your money's worth in the end. If you forget about your perks and let them lapse, you're setting money on fire over the long run.

This is especially true with annual credits, although these can be difficult to use sometimes. For example, the Platinum Card from American Express doles out up to $200 in Uber credits each year, but this credit is broken up into $15 per month increments (plus $35 in December). The credits don't "roll over," so you lose them if you don't use them.

The same is true with the benefit of up to $200 in airline fee credit on the Platinum Card from Amex, which will simply lapse if you don't charge incidental travel expenses from your chosen airline to your card each year.

The bottom line: Make sure you know and understand all your credit card's perks and benefits so you can extract maximum value from each card in your wallet.

Click here to learn more about the Amex Platinum card »

5. Always pay your credit card bill on time

You may believe that a late payment on your credit card every once in a while can't do any harm, but this is absolutely false. Your payment history is the most important factor that makes up your FICO score, with 35% of your score made up by whether you pay your bills on time. This means that, when you pay your credit card bill late, there's a strong possibility your credit score will be negatively impacted right away.

You should always strive to pay your bills early or on time, but if you do happen to pay your credit card bill late, you can always call your credit card company and ask them to remove the late payment from your account. There's a good possibility they'll do this once as a courtesy, but not for subsequent late payments. Either way, you can ask, and the worst that can happen is them saying no.

See Business Insider's list of the best rewards credit cards »

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Please note: While the offers mentioned above are accurate at the time of publication, they're subject to change at any time and may have changed, or may no longer be available.

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