Are you planning to get a credit card? Credit cards are a powerful and convenient financial tool. Therefore, credit card mistakes can become powerful financial adversaries and invite challenges such as getting stuck with late fees. The most common mistakes are easily avoided; read on for our advice on avoiding costly credit card mistakes.
Avoid making minimum payments
Making the minimum payment on your credit card not only increases the amount of time it takes to pay off your credit card balance, it also increases the amount of interest you pay on your credit card. Don’t just pay the minimum payment, rather increase your monthly credit card payment. It would help to pay off your balance sooner and at a lower cost.
Avoid disregarding your billing statement
You risk missing your payment due date if you don’t open your credit card billing statement. You could also miss significant information about changes to your credit card terms. Also, your billing statement is often the first tip-off to any fraudulent activity on your account. It is absolutely necessary to read your billing statement in order to make sure that all the charges are accurate.
Avoid applying for too many credit cards at once
Each credit card application has the potential to knock points off your credit score. You might notice the denials are more frequent if you apply for several credit cards within a short period of time. This is because the lenders start getting suspicious about the sudden increase of credit card applications. So, it is better to leave a decent interval between credit card applications.
Being unaware of your credit card terms can lead to difficulties
An awareness of how your credit card company handles late payments would likely make you pay your credit card bill on time. Also, it would give you more control over your credit card costs.
Avoid incorrect closure of credit card account
Your online credit card payments are recorded in your credit report, which can be affected if you have closed your old credit card accounts incorrectly. This includes not checking for incorrect account information that has appeared on your credit report, or non-payment of past dues.
It is important to keep practicality and productivity in mind when choosing credit cards. A few essential things to consider regarding choice and usage of cards:
- You need to assess how far your savings can go each year by finding a suitable online store to go to for a credit card.
- You should go for a card that can be connected to your business account, especially a cheque account that keeps you from racking up a monthly bill.
- It is essential to review the terms of your credit card at least once or twice a year. You can find them at your credit card issuer’s website, or request them from customer service.
If you have a credit card, you need to use it the right way. Committing any of these credit card mistakes could cost you money.
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