Credit card mistakes are very common and there are reasons for it. A credit line is probably the easiest money that you can spend – just pull it out from your wallet, swipe it smooth, make your payment and instantly gratify the shopper in you. Sweet as it may sound this tale however does not come without a twist….and that is your credit card bill at the end of the month.
If you are able to pay up, good enough but if the payable amount exceeds your cash power, your credit report goes for a toss. This can very well be the beginning of a debt trap that you can possibly never overcome and it’s the end of opportunities too, if you take a hard look at it. The best way, therefore is to avoid credit card misuse. How? Here comes a guide.
Don’t carry over balance
Almost all credit card companies offer the users options of paying off a part of the full balance amount that is due. While this may be an extremely comforting factor in assuring the consumer that they don’t really need to make a run for paying it up in full, it can, on the other hand also create a debt trap of overwhelming proportions for him. Not only would the consequent purchase bills add up on the existing amount, you will also be subject to an inflated interest rate that can leave you dumbstruck. So the golden rule of avoiding credit card mistakes is to avoid carrying forward a balance. Pay up more. Making a budget at the beginning of the month is still a prudent method to understand exactly how much you can spend without earning bad debt.
Don’t pay before the due date
Some extra careful consumers are seen to pay off the bill even before the due date arrives. If you are taking the postal way out for paying your credit card bill, that’s a good thing to do to ensure that delay in a post office does not impose a late fine on your bill. But if you are paying up electronically, don’t pay before the due date. Until it’s really due, be strategic and earn the last bit of interest on your money that you deserve.
Avoid using multiple credit cards
Keeping multiple credit cards is the easiest route to credit card misuse. Naïve applicants, many a time, are seen to sign-up for store credit cards just for a measly incentive or discount on offer. Be a conscious consumer, do extensive research before signing up for one and keep not more than two to prevent misuse.
Use your reward points
While you must not keep on purchasing on your card to fortify your reward point score, as a consumer, you must make it a point to utilize the rewards points that you earn before they expire. Many are seen to forget this in the course and consequently lose out on the cash back offers, free air tickets or incentives that are meted out as reward.
Credit card is good plastic money if you are able to use it wisely. Paying your bills in time and avoiding credit card mistakes can assist you in enjoying the benefits of this magical card sans error.