Top 7 Mistakes That Credit Card Holders Make
You should do your best to manage your credit cards wisely. Otherwise, you may end up in big financial trouble. Unfortunately, many don't realize that they may be making huge mistakes with the usage of their credit cards. Here are the top 7 credit card mistakes that cardholders make:
1. Only Paying The Minimum Payment Due
The minimum payment is just an amount that you must pay back each month to avoid defaulting on the debt. It is beneficial to pay back more than the minimum payment or pay the full balance in full to avoid paying high-interest rates or getting yourself into debt.
2. Making Late Payments.
An easy way to avoid late fees would be to set up automatic payments from your bank account to help you make your credit card payments on time. Before you know it, a few weeks have gone by, and you're late. If you leave it to the deadline, you may find that the payment won't get there quickly enough so always pay a few days ahead.
Paying late is a big mistake for an awful lot of reasons. You will almost certainly occur a late fee, and your past due amount could report on your credit report. You may also lose any promotional interest rates you previously had.
3. Being Deceived By Credit Card Offers.
It is never, ever worth getting a high-interest rate credit card because it offers loyalty points, flight miles, or whatever. Even if it provides a cash reward, it is unlikely to be more than you would pay in extra interest after all, why would they give you free money?
4. Collecting Credit Cards.
Some may think it looks good to have a wallet full of credit cards. These cardholders may find themselves in a situation of having to keep track of all the different cards, balances, and interest rates.
You should limit yourself to a maximum of three to six major credit cards at a time. Any more starts to make you look over-committed in your credit report, and could get you turned down for a bigger loan.
5. Charging More to Earn More Points.
The credit card companies are smart; they trick you by rewarding you with bonus and loyalty points for charging more during a promotion period or a holiday season. So in return, you may end up shopping and spending more than usual to earn more points if you can well afford all your purchases, beautiful! But if not, you may be in for a massive headache when your statement comes!
6. Maxing Your Credit Cards Out.
Your credit limit is a maximum limit; not a minimum one! Whatever you do, don't get a card and immediately spend your entire credit limit. Maxing out your credit cards looks very bad if it reports on your credit report. It is better to spend about 10-20% regularly and pay it back each month.
7. Not Reading the Terms and Conditions.
Finally, as ever, don't sign anything you havenít read! I know it can be tough to read all the fine print, but if you do not understand what you are getting into, then you shouldn't get the card. Pay special attention to any future increases in interest rates, and what kind of fees are associated with the card at hand.
Thanks for reading Top 7 Mistakes That Credit Card Holders Make for more information on credit cards check out my latest ebook Credit Card Hacks Every Girl Should Know https://www.creditwithkiara.com/collections/ebook/products/credit-card-hacks-every-girl-should-know
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