Member Article

9 Popular Errors Credit Card Users Make

People can like credit cards as well as hate them. If they are used with common sense, it may help you a lot, but in case you use the card irresponsibly, it may bring damage to you. There are certain common mistakes consumers often make, read about them below to use your credit card smarter.

1. Failing to read the small print

Lots of problems set in when the credit card user does not know or understand his credit card agreement. Transferring the balance, for instance, you might turn out to owe more if you have failed to understand the rules.

Do not sign anything automatically, study the information carefully and make sure you realize what you are getting, what fees as well as what rewards.

2. Not using the credit card

If a consumer does not use his credit card, the credit card company can close the account. This can damage the credit card holder’s credit score.

If you do not like the idea of using a credit card, make a small payment from it regularly and pay it off immediately. This will help you to keep the card active. You may also swipe it once in a while for the items you need, food, for instance.

3. Not paying on time

If you fail to pay bills due, not only your credit score may suffer your finances as well. Credit cards companies often charge late fees and raise interest rates for their clients not covering balances on time.

In case you forget about your payments, set up the reminders or make the transaction automatic. If you lack means to pay on time, try to cut expenses wherever it’s possible and negotiate with the credit card provider. Most likely he will grant you a grace period.

4. Taking cash advances

Short of cash? Try not to use your card for money advances with sky-high interest rates. Consider borrowing from friends or family or applying to Personal Money Service company, for instance.

5. Making just the minimum payment

Minimum payments cost the consumers lots of money and make them pay off even a slightest debt forever. Check your credit card statement to find out how much you should pay in interest rates only and for how long to be convinced to pay more and get rid of the debt as soon as possible.

6. Using all the credit you’re granted

Swiping your credit card, you do not only risk your wallet, but your credit score as well. Because it is often determined by how much credit limit is used, so try to keep the utilization rate below 30%.

7. Spending just to earn rewards

When your card promise you rewards, it’s difficult not to give in to the temptation to spend more to earn more. Remember that buying things you do not need you risk to spend more than you can afford. Analyze your every purchase whether you really need this or that item, do not allow yourself impulsive shopping.

8. Ignoring your monthly statement

Though you may be sick and tired with the abundance of variable information nowadays the one thing which should not be ignored is your monthly statement. Checking it regularly you will get to know about the changes happening to your fees and rates, payments due and possible errors. Knowing the state of each of your cards may save you a fortune.

9. Carrying a balance to improve your credit

Carrying a balance on your credit cards being unable to cover the total amount it’s clear, to hope you can improve your credit score in such a way is a dumb mistake. The balance taken from your recent statement matters, not what is carried over?

Try to pay your bills in full whenever is possible, you do not necessarily need to pay interest to have a proper credit score.

This was posted in Bdaily's Members' News section by Ashley Grace .