Credit Card Mistakes to Avoid
Having a credit card is very useful. You could travel the world free of charge if you knew how to use them well. Making a lot of money using credit cards or using them as cash back provider has been an experts’ trend. People with financial difficulties could use these very tools to boast their burdens. Improper use of credit cards could be a total disaster. The following are some of the common mistakes that you should avoid by all means.
Avoid opening multiple credit card accounts. Please avoid it. It’s a wrong thing to do. Here is why you shouldn’t: It’s easy to lose track of your spending. Your credit card score could be dented. You will not get rewards. If you feel you can handle more cards, make sure you have at least six months.
It is not a good practice not paying the balance every month. Credit cards are a form of revolving credit and therefore you should pay your balance in full every billing cycle. Failure to do so, the charges you’ve accumulated are rolled over to the next billing cycle. Your balance can only be rolled over after an interest is charged on the balance. People who get into this habit are denied the privilege of receiving rewards. All your profits could be nullified as well.
Many credit card holders are tempted to close down their accounts. They think that if they’re not using their cards, the best thing to do is to close them. It’s totally wrong according to credit card experts. Closing cards as you pay off your previous debts is not advised at all, just store them safely. Do not feel that your account is not worth keeping. Doing such will only hurt your credit score. You credit score will be negatively affected even further if you decided to open a new account to replace the old one.
Going for cash advances: This is not a good thing to do. Taking a cash advance will definitely lead you to WireLend to take out a loan to pay off your cards. Cash advance carry an interest rate of several points higher than your APR. Not only that, interests start accruing immediately while you have been subjected to a host of fees.
The last point here may sound crazy. Of course it is. Most new credit card users usually throw away free money. Ignoring all the advantage of services that most credit card companies offer. If you open an account that has sign up bonus or any other bonus, do your due diligence to collect your bonus.
Last insights. According to credit card experts, all new persons to the game should play it slow and smart. Newbies should stay away from cards with annual fees. When used properly, credit cards could be a great source of financial assets.