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Mistakes To Avoid With Credit Cards

Updated on January 4, 2012
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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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    • dumindu89 profile imageAUTHOR

      dumindu89 

      6 years ago from Sri Lanka

      Thanks for all of your comments. I am pleasure to hear that you found this information as useful. :)

    • kerlynb profile image

      kerlynb 

      6 years ago from Philippines, Southeast Asia, Earth ^_^

      Yay! You're so right! Interest rates in credit cards will really break the bank. Thus, we don't charge anything to our cards that we cannot pay by month's end. Also, we try to pay in cash for most of the things we buy.

    • profile image

      Giselle Maine 

      6 years ago

      Some great advice here. I only use a credit card for things I already have the money to pay for - credit card can sometimes make for a safer transaction, and of course it's the only way to buy online. But basically, if I don't have the money to buy something, I don't buy it. I agree with sgbrown that people need to think each and every time they pull out their credit card.

    • dumindu89 profile imageAUTHOR

      dumindu89 

      6 years ago from Sri Lanka

      Thanks for your valuable comments and vote ups.

    • Brett.Tesol profile image

      Brett Caulton 

      6 years ago from Thailand

      Very good advice! Voted up and useful.

      I worked in the bank for years and it was shocking how many people would try to spend under the checked limit, only to incur almost $40 per transaction, often for transactions less than $10 ... madness!

    • sgbrown profile image

      Sheila Brown 

      6 years ago from Southern Oklahoma

      Great hub! I worked as a debt consultant for about 8 years and have seen some real nightmare stories. People need to think before they break out that credit card. I also wrote a hub concerning credit card debt. Maybe our hubs will help. Voted up and useful!

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