Credit Card Mistakes

Credit Cards and be very dangerous. When using your credit cards, you could be playing with fire. Sadly, there are many of individuals out there who don't realise how dangerous credit cards can be and because of that they make a number mistakes with their credit cards every day.

Late Credit Card Payment

Many people are financial avoiders. If you don't set up some kind of automatic payment, it can be very easy and tempting to just put your credit card bill on a pile, telling yourself you'll look at it later. But before you know it, a few weeks have gone by and now you have late payment. If you leave it to the deadline, you might find that the payment won't get there quickly enough - it's not a deadline for sending the money, it's a deadline for the finanical institute to receive it.

Late credit card payments are a big mistake for an number of reasons. You will almost certainly be charged a late payment fee, and your late payment will go on your credit report for everyone to see. Also if you had a better then average interest rate because you were a good client, you may find that you'll lose any good rate you had, and your debt is automatically thrown onto the worst rate the company offers.

To avoid credit card late payments, you should always post your payment at least a week before the due date. If you've left it to the last minute, phone up and try to pay it right away over the phone.

Being Taken in By Credit Card Rewards

Unless you are always going to pay off the complete balance at the end of every month, it is never, worth getting a higher-interest card simply because it offers some kind of credit card reward points. Even if it offers a cash reward, it is unlikely to be more than you would pay in extra interest - after all, why would they give you free money? For most people, who keep a balance on their credit card, all 'rewards' do is pay you off with your own money to make you feel like you're getting something for nothing. You're not.

Collecting Credit Cards

You've seen those people who open their wallet or bag and it looks like they have about a hundred credit cards it there. When you have to many credit cards it can be hard to keep track of them, the balances and interest rates of each card. Don't be a credit card collector. You should limit yourself to a maximum of three cards at a time - any more starts to make you look over-committed in your credit report, and it could get you turned down for that larger loan you may need.

Maxing Out Your Credit Card

Your limit is just that: a limit, not a minimum! Whatever you do, don't get a card and immediately spend your whole limit. This looks very bad. It is better to spend about halfway regularly and pay it back. Wait for the company to increase your limit (which they quickly will), and then you'll get that extra money without having to maxed-out a card.

Not Reading the Terms and Conditions

Finally, and this rule is not just for credit cards, don't sign anything you haven't read! I know it's hard going though all the jargon and information, but if you can't manage to read the terms and conditions then you shouldn't get the credit card. Pay special attention to any future increases in interest rates, and what kind of fees you could be charged.