2017-11-17

The Top Credit Card Don’ts

Credit cards can easily seem like the knight in laminated shining armor when you need cash for that one thing you cannot resist buying or the dream vacation that you must go to, plus you are earning big rewards on it, so you are not really splurging irresponsibly, or are you?

Credit cards are great to establish a good credit score by keeping up with your payments and showing off this pattern during your loan borrowing meeting. That being said, owning a credit card is enough to put you at risk of making blunders with the use of it.

Having Too Many of Them

Foregoing the shredder may not be the best decisions, especially if you are sporting too many credit cards. You have to stop and think if you really need a credit card. Essentially, to build a good credit score, you need 3 cards. If you have more than that and you do not really need them then you stand a good chance of being pulled down in debt.

What most people do not know is that having too many credit cards can also impact their credit score negatively, which would ultimately negatively influence their eligibility to be able to borrow loans. Do not make the mistake of dividing your spending between different credit cards, just because you find yourself hitting the limit of one card; chances are you will be tempted to utilize till the limit of the second card as well.

Complex Introductory Rates

It is easy to misunderstand rates. Most people get a new card so that they can transfer the money to a no-interest account. ‘Deferred Interest Rates’ are a type of introductory rate that traps consumers. The deals are usually offered with big purchases like an appliance or a piece of furniture. Remember that when it comes to credit card, interests are stacked from the day of purchase. If you don’t pay off debt during the introductory period, the rate increases.

Matching the Wrong Card to Your Lifestyle

People are usually tempted to ignore the fine print on a card because they are too busy rummaging through details of its other attractions. Choosing between different credit cards is not about which ones get you the best rewards and rebates. If you are carrying a balance that comes with high interest rates, remember that reward points are rarely helpful.

Making Late Payments

Paying your credit card bill late may be better than not paying it at all, but that still has you paying off late fee, and on top of that a bad credit report. You should review your monthly statement, and make sure you prioritize expenditure and the bills you have to pay off, this way you won’t ever be late to pay off the bill. Also, checking your statement vigilantly every month helps you detect a case of identity theft, if there is one.

Paul Gonzalez