10 Common Credit Card Mistakes
10 Common Credit Card Mistakes : As it is so easy to get pulled into the world of credit cards, it is so easy to end up with a credit card debt. It is important to figure out those debt traps early in life and to avoid them. Here are ten common credit card mistakes and some ways to avoid them.
One: Having plenty of available credit to fall back on. There is nothing wrong with wanting to use a credit card to make very high limit purchases. However, you should limit it to what you know you can handle and then stick to it. Some people use their credit cards for entertainment purposes only and then end up with bad debt because they couldn’t afford to pay it off.
Two: Not being prepared to pay off the amount owed every month. One of the worst things people do with credit cards is not pay them off every month. With low limits, those balances will only go up and up. The sooner people start becoming a responsible credit card holder, the better off they will be.
Three: Don’t take the time to read the fine print. So many cardholders don’t take the time to read the credit card agreement or the terms and conditions. For example, some cards have fees they charge for transfers. Too many cardholders transfer their credit card balances because they know that they will no longer be paying as much!
Four: Ignoring the late fees. Each month, credit card holders will be subject to some form of late fee. Most times, this fee is around $35 or $40. However, some credit cards have a no interest period on balance transfers. It is important to ensure that the credit card you have does indeed have such a feature.
Five: Struggling to pay off debt. You need to be able to pay off debt on time. If you struggle to pay off debt, you should look at minimizing your charges because you need to pay your balance off. Instead of thinking about how you will pay off a few extra bucks from a purchase, think about how you can avoid spending more money in the near future.
Six: Rushing yourself to borrow more credit. The more credit card offers you receive, the more tempted you will be to borrow more credit. With this thinking, you will end up with more debt than you can handle, but you can say that this is just collateral on your loan. Debt is a loan that you must pay off not an additional one. You need to borrow responsibly.
Seven: Only using your credit cards for emergencies. Before you sign up for a new card, think about why you need to get one in the first place. If you receive just because you want it, then there can’t be any good reasons unless there is an emergency. Always pay your balance off on time.
Eight: Financing for fun. So many times, cardholders just use their cards for fun. This is bad because in the end, you are not getting the much needed experience. Just because there is an introductory transfer rate, transfer a little bit of your funds onto it, splurge on something you want and then pay it off.
Nine: Carrying a balance. Money has no legs, so you should not use your card to finance purchasing goods and services from other cards. You need to work your cards for rewards, but you can’t finance with your credit cards. If you do, it will cost more money with higher charges and it will end up costing you more money.
