Credit Card Mistakes; Things To Avoid at All Costs

Credit Card Marketing Report #8   Credit Card Mistakes

Perhaps the most important thing to understand about credit cards is that they’re potentially harmul, at least as it relates to your credit and financial welfare. When handeled well and responsibility it can be an assest and help you build financial strength.

On the other hand they can damage your credit when used irresponsibly and there are countless people who make costly credit card mistakes daily. Here are the biggets ones to avoid. 

Not Reading the Terms and Conditions.
Don’t sign anything you haven’t read! This is just as true as in any other situation. It’s no secret that this can be very time consuming, but if you can’t manage to read the terms and conditions then you shouldn’t get the card. Special consideration should go to any future increases in rates and what kind of fees you can be charged.

Missing Payment Deadlines.
This is an especially easy mistake if you don’t set up some sort of automatic payment. This is not only because you may simply forget to send in money, but also because these companies have a deadline for receiving the money, which is different from a deadline for sending (so a mailed item which arrives late costs you). 

Paying late is a small mistake with big penalties. You will almost certainly be charged a late payment fee, and your late payment will go on your credit report for everyone to see. Further, you may also lose any good rate you had, and your debt is automatically thrown onto the very worst rate the company offers.

To avoid late payment, consider automatic payment. If that is infeasible, you should always post your payment a long time before the due date (at least a week). If you’ve left it to the last minute, phone up and try to pay that way. 

Hitting the Limits on Your Cards.
Whatever you do, don’t get a card and immediately spend to the whole limit. This looks very bad, as it implies that you have no other sources from which you can spend. It is better to spend about halfway regularly and pay it back. Wait for the company to increase your limit (which they quickly will), and then you’ll get that extra money without the negatives of a maxed-out card.

Having Too Many Cards.
Though having credit cards for convenience or emergencies is legitimate, some people simply have too many cards. It becomes troublesome to keep track of all the different cards, balances and interest rates. Don’t be one of these people. You should limit yourself to a maximum of three cards at a time – especially since any more starts to make you look over-committed in your credit report, which could cause you to be turned down for a bigger loan. 

Choosing Based on Rewards. 
Though strong rewards can be very tempting, it is never, ever worth getting a higher-interest card for them. For example, a possible cash reward will almost never be more than you would pay in extra interest. If you run any balance, all rewards do is pay you with a portion of your own money.

Click here for more information about Credit Card Marketing Reports.