CREDIT CARD Mistakes: From online shopping to paying bills, credit cards are used by everyone these days. Credit card removes your money problems, but sometimes using credit card incorrectly can also cause harm. Let us know what are those mistakes which you should not make.
1. Not paying bills on time
If you feel like you can’t afford to pay your bills, having a credit card can take a toll on you. If you don’t pay your bills on time or pay late at most, it can hurt your credit score. Having a credit card after the payment deadline has passed can be a risky endeavor for them, as late credit card payments come with penalties as well as high interest rates.
2. Paying only the minimum due
Despite having a credit card, its purpose is lost if it is not used less or not, hence if you are not using the credit card then it means that the cardholder is not making full use of his card. Apart from this, you should also keep in mind that you do not take the responsibility of minimum balance due and try to pay the entire amount in one go.
Many times when credit cardholders are unable to repay their entire bill amount on time, they start paying the minimum due amount but this will also worsen your financial condition.
3. Not choosing the right credit card
You should choose the credit card according to different specifications. Banks and credit card companies design many types of cards keeping in mind your different needs. If you want to take a card for travelling, then you can apply for a separate card for that so that you get more reward points because this card may be more beneficial than the card you are using. Therefore, it is important that you choose the credit card according to your needs.
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4. Not understanding credit card fees
If you are not aware of what charges are associated with your credit card, it can cause you greater loss. You have to pay an annual fee on every card. In such a situation, you should see whether the benefits of the credit card you are taking are justified in comparison to the fees or not.
5. Withdrawing cash from your credit card
You should use the credit card only for online transactions or by swiping it at the POS machine. Credit card companies charge a lot of interest on withdrawing cash from credit card, hence the bank charges a fixed fee for withdrawing cash. In such a situation, credit card users should not withdraw cash.
Some Additional Tips
- Set up automatic payments to avoid missing due dates.
- Create a budget to help you manage your spending and avoid overusing your card.
- Check your credit score regularly to monitor your financial health.
Final Words
Credit cards can be incredibly useful financial tools, but they require responsible management. By avoiding the mistakes discussed above, you can leverage your credit card to enhance your finances, enjoy rewards, and maintain a healthy credit score.