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Common Credit Card Mistakes (that we all make) |
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There are many common mistakes that we have all make when using credit cards. In order to help you identify and avoid making these same mistakes (and also to let you know you are not the only one who has made them), here is a list of some of the more common credit card errors:
(See below for more information.)
1. Applying for a credit card in the first place - credit cards may not be for everyone. There are many factors that need to be determined before seeking a credit card.
2. Raising credit card limits - raising your limit simply means that you have more credit to spend. and in the end pay back. A higher limit may make it easier to fall into credit card debt. It is important not to spend money that you don't have. Live within your means.
3. Not understanding the terms and conditions - when applying for credit cards it is not always clear as to what the interest rate or rates you will be charged. It is important to understand all of the terms and conditions when applying for a credit card. You should always know exactly what your interest rate is on all your cards.
4. Maintaining a balance - don't fall into the debt trap of keeping an on-going balance on your cards. Those interest charges add up fast - and you will begin to feel that it is normal to have an outstanding balance. It may be relatively 'normal' - but it is not financially healthy. The solution - always pay off your balance each month.
5. Co-signing for a credit card applicant - you should avoid co-signing for a credit card applicant as you become responsible not only for yourself but for the other party as well. There is huge potential here for your credit rating (FICO score) to be negatively impacted if that person runs into trouble.
6. Not shopping around for the best interest rate - rates and terms vary with each and every company. A little research can provide a lower interest rate and make it easier to manage your credit cards.
7. Choosing the wrong type of card - ever chosen a credit card only to find out it is not accepted in the stores you shop at?
8. Signing up for cards with low introductory interest rates - that increase dramatically once the initial period is over.
9. Taking cash advances - this is a quick way to get into heavy credit card debt. There are usually higher interest rates charged for cash advances.
10. Being late with payments - this can hurt your credit rating in a hurry.
11. Not reading the fine print.
12. Owning and owning on too many credit cards - be good to yourself - do not go overboard with credit. Sometimes the kindest thing we can do to ourselves is to not get that new pair of shoes, or that latest shop toy.
As you can see there are many common credit card mistakes that we have all made at one point or another. Avoiding these mistakes will help you to choose and use your credit cards wisely. |
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