Credit Pitfall: High balance on a small credit card

One of the biggest credit pitfalls people fall into is when they have a high balance on a small credit card. For example:

You have a $500 credit card and charge $400 on it. When creditors see you’re using 80% of your available credit, they mark you as HIGH risk. Now, let’s say you have a $1,000 credit card and charge $400 to it. Guess what? You’re no longer a risk because you’re only using 40% of your credit instead of 80%. To creditors, this means you’re a responsible, savvy, frugal adult.

Go you!