Credit is an unavoidable part of life. The credit system isn’t always easy to understand, but you know it’s important. One of the most confusing things about credit is just how dangerous it can be for your financial health. In fact, a single credit card purchase can ruin your credit.


While this might sound extreme, it’s true. It only takes one mistake with a credit card to do years worth of damage to your credit score.


What does this mean about credit? More importantly, how can you learn healthy financial habits so you can create a strong future for yourself and your family. In this guide, we’ll explore how a single credit card purchase can ruin your credit as well as what to do about it.



Credit card online purchase



How Do Credit Scores Work?

First, we need to talk about the basics. How do credit scores work? How is your credit rating calculated? There’s a lot of confusion about the realities of credit.


If you’re confused, you’re not alone. A reported 80% of Americans only know basic facts about their credit scores. While this is a good start, it pays to learn as much as you can about how credit works and is reported.


Your credit score, in simple terms, is a way to rate your credit-worthiness. It’s used by lenders to determine whether you’re a good candidate for a mortgage, car loan, credit card, or any type of credit. Your credit score is calculated based on a number of factors including:


  • Your payment history
  • Age of your credit accounts
  • Types of accounts
  • Numbers of hard credit inquiries
  • Debt usage (aka credit utilization)


In a perfect world, you’ll have a low credit utilization and pay all of your bills and debts on time. Unfortunately, things do happen. Sometimes you’re caught off guard and can’t afford a payment or you take on more debt than you can afford. These things hurt your credit, but they’re not impossible to overcome.



Why Every Purchase Matters

When it comes to credit, every purchase matters. As we mentioned at the beginning of this article, it only takes a single credit card purchase to ruin your credit.


How could this be possible? It doesn’t matter what you purchase. What matters is how you handle your purchases.


Let’s look at an example. Say you purchase a new pair of shoes for $60. This all seems fine, and you have the money to pay for it. However, if you miss your payment deadline, you might find yourself facing a late fee and interest. Suddenly that $60 purchase turns into an $80+ purchase.


Though it’s annoying to pay extra fees, this still won’t ruin your credit. However, it can get much more extreme. Let’s say you made a few more purchases on top of that $60 pair of shoes. Perhaps that payment is actually part of next month’s balance, so you don’t realize it’s not paid off with your first payment. Not all banks will let you know about missed payments, so you might find yourself facing several months of interest and late fees.


Now you’ve got a problem on your hand. Several months of missed payment will add up quickly, damaging your credit score. That’s not something you want to deal with, especially for what might have been a minor purchase.



Credit Card Tips for Responsible Spending

The good news is this credit horror story doesn’t have to be your reality. There are a few tips that will help you spend responsibly so you can build a healthy credit score. Try these tips below:


  • Set reminders – Always set reminders for payment deadlines and due dates. Your credit card payment will be due on the same day every month, so make sure you have an alert in your calendar or automatic payments.
  • Talk to your lender – If you know you won’t be able to make a payment on time, talk to your lender sooner rather than later. Lenders just want to get paid. They often have options for those who are proactive and willing to work with them.
  • Spend cautiously – Credit cards make it easy to spend more than you can afford. Always spend cautiously and keep your budget in mind.
  • Check your credit – Finally, check your credit score regularly to stay on top of your progress and make sure everything is accurate.


It’s crazy to think that a single credit card purchase can ruin your credit, but it’s true. The good news is you can be proactive to keep your credit in good standing right now. Learning how to use your credit card responsibly is an important step in becoming a financially savvy individual.