Credit Card Mistakes: People always like to buy things which, along with fulfilling their needs, also add up to their lifestyle. And in cases such as paying through a credit card, where you don’t actually have to spend hard cash, can make you spend without thinking about the expenses at all. But you must be aware of this temptation which has resulted in putting many credit card holders under huge debts. There are many such credit card mistakes which can let you regret later and hence should be avoided at the beginning itself. Some of them are mentioned below:
Using Card for Groceries
Some people use credit cards for buying groceries and items of daily needs, which can make them, lose track of their expenditures and thus increase them ultimately. You need not to use credit card everywhere. Using cash helps you realize the amount of money you are spending.
Paying Minimum Amount
This is one of the most overlooked mistakes that can have grave consequences later on. Paying only minimum monthly amount of your credit card bills piles up the interest rates every month and you end up paying way more than you actually would have.
Missing the due date of payment not only increases the interest rate but also add an extra fine on being late. Moreover, this can harm your credit scores to a large extent which later on would make it difficult to apply for loans.
Not having a Credit Card
You might think that since it is so difficult to own a credit card, why not just have a debit card and stay away from all the hassles. But having a credit card is some of the best ways through which your lender or bank can keep track of your spending habits and judge whether it is worth giving you a loan or not.
Not Reading the Documents Properly
Documents such as your monthly credit card bills and terms of your credit cards are very important to read carefully. Reviewing your bills also make you analyze your expenses and hence control them if necessary. Similarly reading credit card terms helps in using your credit card with all the benefits it has to offer.
Exceeding Monthly Limits
This can put your credit scores in jeopardy. The ideal way to go would be using 30% of your credit card limit. This keeps your credit score intact.
Using credit cards for reward points
There are various kinds of reward points which might seem lucrative while you are shopping. But if you calculate your expenses required to gain these rewards, you will understand that you end up spending way more than the value offered by them.
Single Type of Usage
This is one of the mistakes which can make it somewhat less easy to get a loan in future. This is because the more variety of loan payments your lender says in your credit card history, the more he/she will be assured that you are a potential customer to lend money to.
To have a credit card calls for some responsible measures that everyone must. This not only prevents you from losing an extra amount of money but also opening gates for the future to acquire loans without any complications.