Sloppy Credit Card Habits You Must Ditch

By | June 3, 2019

Are poor Credit Card habits putting a dent in your finances? It’s time to set your finances in order. To make things easier for you, we’ve compiled a list of toxic Credit Card habits to absolutely give up.

It’s common knowledge that having a good Credit Score, preferably a 750+ score, is a sure way to make yourself eligible for credit. Did you know that managing your Credit Card well is one of the easiest ways to boost your score?

To remain creditworthy, it’s necessary that you keep an eye on the score and use your card wisely by avoiding the pitfalls of bad financial decisions.

However, it’s possible that over the years, you may have developed certain habits that have the potential to ruin your financial game! We’re here to help you get your Credit Card habits back on track!

  • Paying the minimum amount 

Most banks allow consumers to make minimum partial payments. This often misleads cardholders into thinking that it’s ok not to pay the entire bill amount in full.

The minimum payment is usually just about a small percentage of your Credit Card balance.

Paying off just the minimum balance each month will be harmful in the long run as this means that your debt will keep piling over time.

In addition, paying the minimum each month will cost you in the form of interest and also hurt your credit history. Experts suggest that you pay off your entire balance each month. In the event that you’re short of cash, at least try paying off as much as you can.

Additional Reading: A Stress-Free Guide To Managing Your First Credit Card

  • Missing payment deadlines

With work deadlines and household chores, it can happen that you forget paying your Credit Card bill by a day or two. While this will typically result in late-payment fees, the problem arises when missing payment deadlines becomes second-nature to you, especially if you’re in possession of multiple cards.

Remember that a missed or late payment remains on your credit report for seven years! You can easily avoid this by setting up reminders or opting for automatic payments. Such services will ensure that you never forget to pay your bills.

Additional Reading: Modern Habits That May Be Hurting Your Finances

  • Closing old Credit Card accounts 

Closing an old Credit Card can lower the total amount of available credit that you can use. Let’s say that you have high balances on your other credit cards. Under such circumstances, closing an old card will increase your overall credit utilisation and damage your credit.

In addition, remember that an open credit account helps you improve the length of your credit history, and in turn, improves your Credit Score. Your credit utilisation and the age of your credit history contribute to a good 40% of your Credit Score.

Additional Reading: How Your Credit Card Habits Can Kill Your Business

  • Turning a blind eye to reports 

Ignoring the Credit Score and Credit Card statements is one of the worst mistakes made by Credit Card holders. Did you know that there are multiple benefits of reading your Credit Card statements? For instance, going through your bill statements is a sure way to spot unauthorised credit card charges or billing errors. 

Instead of just checking your Credit Card statement for your balance and payment details, review the entire statement carefully to verify your account activity. In case you find errors, report them to your card to issuer immediately. This will make sure that you’re not held liable for any charges you’ve not made.

Additional Reading: 25 Personal Finance Habits You Must Follow

  • Making too many applications

Too many credit inquiries may hamper your Credit Score. When you apply for credit, the lender looks into your Credit Score and your credit history to decide if you’re credit worthy. When a lender checks your Credit Score, it qualifies as a hard enquiry, which can reduce your score.

Multiple credit enquiries, therefore, is a sure recipe for disaster. Not only will it lower your score, but it will also depict you as desperate for credit in the eyes of the lender, thereby significantly ruining your chances of credit in the future.

In order to apply wisely, make sure that there’s at least a gap of six months between each enquiry. Also, keep checking your score regularly as checking your score by yourself does not reduce it!

Additional Reading: Here’s Why Your Credit Score Is Still In The Dumps

Pro Tip: If you’re not sure what your score is, check your Experian Credit Score for FREE and in under 3 minutes!

And to top it all, the mistake we’ve all been guilty of at some point! Swiping your card without checking your available credit. Thanks to advances in technology, now you can check your available Credit Card balance at just the tap of a button!

Additional Reading: Habits Of The Fiscally Fit

If you’re on the lookout for a Credit Card with awesome cashback offers, reward, and discounts, you’ve arrived at the right place, my friend! We’ve got just the right cards for you to pick from! What’s better is that we’ve got everything finance related, be it Personal Loans or Fixed Deposits, right under one roof!

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