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Wednesday, Apr 23rd

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Credit card mistakes you should avoid

Credit card mistakes you should avoid

Credit cards play an important role in business and have become an important part of every business women's life. It offers buyer protection, convenience and even helps us to boost credit scores. Credit cards make our life easier if they are used wisely but can also put you to debt if not used responsibly. Here are some mistakes that credit card holders make.

Having too many cards:
It is true that having many credit cards raises your credit score. But applying for too many cards is not good as it will raise your lender's eyebrows. This mistake can be avoided by picking few cards with credit limits of $2,500 and having low interest rates. Avoid applying more for credit cards. If you have too many cards and if your account is closed then your credit score gets lowered. Instead pay off some extras and use them for a small purchase every month and keep your account active.

Ignoring the Fine Print: You can face difficulty in understanding the terms and conditions of credit cards as they are not easy. Don't ignore them as it won't make them go away. Many credit card holders get surprised when their credit limit goes down or interest rates suddenly spikes. Avoid making this mistake. Read the terms and conditions again and again, and if you don't get it, call your customer service and/or search on the internet.

Not Reading the Statements: Reading your monthly credit card statements is more important than reading the terms and conditions. If you don't have a close look towards your monthly charges, you might be paying for the items you didn't even buy. As credit card fraud is uncontrolled, you should check your monthly statements for illegal charges. Some cheats try to creep in small charges like $10 or less so that you don't notice it. Whenever you find some illegal charges, call your card issuer and report a fraud.

Avoid Making Minimum Monthly Payments:
Minimum monthly payments ranges from 2% to 5% of the total balance. If you make payments at this rate, you have to pay for many years in order to pay off the credit cards. Your credit cards lenders won't mind it because they get to collect financing fees and interest payments. Double up on monthly payments whenever possible, as it can bring your card balances down so that you can manage it.