5 Credit Card Mistakes To Avoid

By | October 17, 2017

Whether you’re a Credit Card veteran or you’re thinking about getting your first Credit Card, here are 5 common Credit Card mistakes you need to avoid.

5 Credit Card Mistakes To Avoid

Getting your first Credit Card is a financial milestone. Your Credit Card is a symbol of your financial independence. If used wisely, it can teach you how to develop good credit habits and manage your finances better.

Additional Reading: How To Choose The Best Credit Card

So, whether you’re a Credit Card veteran or you’re thinking about getting your first Credit Card, here are 5 common Credit Card mistakes you need to avoid.

1. Ignoring the fine print

Getting a Credit Card is an important financial decision. Before opting for a card that catches your fancy, make sure you read all the terms and conditions that come with that particular card. Always be aware of what you’re signing up for or you may regret it later.

2. Not comparing Credit Cards before choosing one

When comparing Credit Card offers, you must remember to pay close attention to the APR (annual percentage rate) offered on the card. Interest rates vary widely among different lenders.

Additional Reading: Swipe Right On Credit Cards

3. Signing up for a Premium Rewards Credit Card

If you’re looking to get your very first Credit Card, it may not be a good idea to opt for a premium rewards card that comes with a hefty annual fee. As a first-time user, you might find that you won’t actually use all the benefits of a premium Credit Card.

It may be in your best interest to look for a basic card with no annual fee that will allow you to build your credit history.

Additional Reading: Credit Card And Your College-Going Kid: Is It A Good Combination?

4. Missing Credit Card payments

If you don’t make at least the minimum payment on your Credit Card on time, every month, you will be charged a much higher interest rate and late fee. And if you repeatedly pay your Credit Card bills late, your Credit Score will take a hit.

Here’s an idea: Check your Credit Score for free!

You can quickly build an excellent Credit Score with a steady record of timely payments. To make it easier to remember, opt for email, phone or text reminders of your due date. Better still, choose to have the payment auto-debited from your Savings Account.

Additional Reading: How Late Credit Card Payments Affect You

5. Making Just the Minimum Payment

While it may be tempting to pay just the minimum required amount every month, it could cost you dearly in the long run. The best way to use a Credit Card is to avoid interest charges by paying the entire bill every month.

In case you absolutely can’t do that, then try and pay off as much as possible. Let’s tell you why paying only the minimum due on Credit Cards is a bad idea.

Additional Reading: 5 Things To Know For First-Time Credit Card Users

Now that you’re aware of all the Credit Card mistakes your need to avoid, it’s time to find your perfect plastic mate!

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