The vast majority of adults in the United States have access to a credit card of some description. Whether it’s a ‘bad credit’ card, a platinum, only-for-the-wealthy card, or anything in between, the chances are you have one – or have had one in the past.

However, these little cards are actually something of an unknown to most of us, and while we are happy to spend on them, many people are unaware of the facts.

With this in mind, here are a few things you should be aware of when building debt on a credit card – knowing the facts will help you avoid making some serious debt mistakes.

Your credit score is vital to everything

Before you even take out a credit card, make sure you check your rating with one of the credit reference agencies. Your score is the single biggest factor in the decision-making process when it comes to setting your interest rates. Yes, those rates you see advertised might be attractive, but lenders only give them to people with excellent credit. If you have less than a perfect score, you’ll end up paying more interest.

You should pay more than minimum payments

If you have a credit card debt and are only paying back the minimum each month, the amount of money you owe will just grow and grow. As usatoday.com suggest, it’s better for you to pay off your card every single month in full, so you don’t attract any interest payments at all. Failing this, make sure you pay as much as possible, as your minimum payment won’t even cover the interest charges in many cases.

You could get a settlement

Most credit card debts are unsecured, meaning you don’t have any capital to lose should you default on your obligations. While it’s not a good idea, you can often use this to your advantage to come to a settlement agreement with your lenders. According to debtsettlement.co, you should always consult a settlement lawyer or financial expert beforehand. But, if you are struggling to pay back your credit card debts it can often be a good route to ease your financial worries.

They never go away

That said, if you do default on your credit card debts, it’s going to be a stain on your credit rating for a long time. Your debts won’t go away until you reach an agreement with the lender, and will remain on your file for seven years, preventing you from getting favorable credit terms in the future. If you don’t pay, you could end up in court and face being sued. It’s a serious issue, and one you shouldn’t run away from – it’s not going to go away magically.

They have limits

Finally, lenders have a limited time to collect credit card debts. It’s called a statute of limitations, and it bars lenders from pursuing you through the courts after a set amount of time, which can vary from state to state. You’ll still owe the lender or debt collector money – but they won’t be able to sue.

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