A credit card can be a wonderful thing, but only if you use it responsibly. It is crucial that you don’t let your spending get out of hand. This article will list a number of different mistakes that are all too common when it comes to credit cards. Learning about these mistakes can help you avoid a ton of big problems later on. If you want to keep your finances going strong, it is very important that you read this article over carefully.
- Only Paying the Minimum
You definitely don’t want to pay only the minimum amount on your credit cards each month. This will only serve to keep you in debt for longer than necessary. When you pay as much as you possibly can, you will be able to get out of debt much faster. Take the time to look at your budget and decide how much you can put towards this particular expense. It is very important, so you’ll want that to be reflected in your budget.
- Making Late Payments
Even a single late payment on your credit card can hurt your credit rating in a very noticeable way. It also means incurring late fees, which will just put you deeper in the hole. You need to make a point of always paying what you owe on time. It should be as much of a priority at your utilities and rent or mortgage. Remember to keep track of when each payment is due as well. You should try to pay your bill online, as it is much easier and more convenient.
- Letting People Borrow Your Credit Card
Another huge mistake that people make with their credit cards is letting people borrow them. It is never a good idea to do this, because it’s simply too risky. The last thing you want is to have a lot of additional charges on your card. The hard truth is that a lot of people who borrow money from friends and family never pay it back. This can also hurt your credit rating in a big way, so you should think twice about it.
- Not Reading Over Your Statement
Many people don’t pay any attention whatsoever to their monthly credit card statement, but it’s always a mistake. You need to make sure that there aren’t any strange charges on your card that you did not authorize. If you are the victim of fraud, you will definitely want to know it right away. The sooner you realize this, the sooner you can put an end to it. Make sure to contact your bank right away about any charges that you didn’t make.
- Closing Old Credit Accounts
It might make all the sense in the world to close old credit card accounts, but this can lower your credit score by quite a bit. You will just want to keep these accounts open, as it can actually help your credit. This is just one small part of proper credit utilization, which is essential for maintaining a healthy overall rating.
- Refusing to Get a Loan to Pay Off Debt
Sometimes getting a loan is the best option you have when it comes to clearing credit card debt quickly and effectively. Short term loans can be obtained online within a matter of hours. You should take some time to explore this option before deciding what to do. A short term loan can do wonders to improve this type of situation. Make sure that you spend a decent amount of time looking for a highly reputable private lending company. This will help you get the money you need with minimal strings attached.
- Not Reporting a Missing Card
If you find that one of your credit cards is missing and you cannot find it, you’ll need to report it as such right away. Whether the card has been stolen or just lost, you need to do this immediately. Missing credit cards often end up getting used for fraudulent purposes, so you have to keep this in mind. You need to have the card cancelled so whoever stole/finds it will not be able to make any charges.
Credit cards can help you in a lot of bad situations, but they can also cause you a lot of headaches. It is crucial that you act responsibly with all of your cards, because otherwise you will have to face the consequences. You don’t want to end up with a ton of debt that you are unable to pay back for a very long time. The more you look into these things, better prepared you are going to be. A credit card can actually help to improve your overall score, but only if you use it the right way and don’t make any of these mistakes.