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Mistakes To Avoid With Credit Cards
Surveys have shown that bad debt is directly linked to credit card charges. So the way you use credit cards definitely influences how well you stay away from problems with debt. Here are some common mistakes that a lot of credit card holders commit regularly that everyone needs to stay away from.
Using a credit card for getting cash advances is definitely a no-no! Many credit cards will charge you an APR that's much higher for cash advances, and they charge fees for them as well. Since they have no grace period, you get billed the exact moment that you make your withdrawal.
Staying With The Minimum Payment
Most people pay only their minimum balance due on their credit cards and don't pay the entire balance. It's true you can submit just the minimum every month, but doing this increases the risk of you falling into that old debt trap.
You will not just rack up interest fees but it's going to take longer for you to complete all your payments. Imagine if you save an extra 10-20 percent in interest charges on your bill every month. There's no truth to the thought that you have to carry an ongoing balance on your account in order to bring your credit score up. The thing that raises a credit score is paying debts off on time.
Sometimes serious debt problems have a small beginning. People just keep on using credit cards even when they are already finding it had to make their monthly payments. Some of them won't even take time to check on their accounts or their billing statements. Some people even try hiding whenever the credit card companies begin their calling campaigns for collecting debts.
This type of behavior is not going to solve anything. Worse than that, it will create an even bigger problem. If you suffer from a financial crisis, the talk to the credit card company. Explain your situation to them and many times they are willing to help.
Charging Frivolous Expenses On Your Card
If it's not an emergency then don't pay for it with your credit card. When you have the cash use it. Frequent charging habits can become dangerous.
First off you can tend to spend more with a card when you go shopping. Secondly, you have the possibility that purchased items that cost you $10 are going to wind up costing $20 or more due to the added interest, not to mention late penalty fees.
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