Having a credit card can be both a blessing and a curse, depending on how you handle it. They always come in handy, especially if you are short on cash. Furthermore, these cards offer perks in terms of cashback, rewards, travel miles, and even protecting your purchases.
You will enjoy using these plastic cards if you pay your balances on time, however, if you are already swimming in debt or don’t know how to use them, you will regret why you signed up for one. It is important to know how to best use your credit card so you don’t put yourself in a bad financial position.
With that, there are common mistakes that many people make when it comes to credit card use. The first step to avoiding these mistakes is to identify what they are. Here are credit card mistakes that people make.
Using A Credit Card To Pay Medical Bills
Medical bills can be expensive and overwhelming, especially if you are not prepared in advance. If you find yourself in this kind of state, consider negotiating with the hospital or whoever you owe money, but don’t add the bill to your credit card. Medical institutions are often able to offer payment plans with no interest charges.
Many people also make the mistake of just paying the bill without reading through; you want to be sure if the bill is accurate. Credit cards often have high-interest rates. So, paying with your card will be more expensive in the long run.
Not Paying Your Debt
Some folks ignore the fact that they have debt either because they are embarrassed or are not able to pay it off. Whatever the case, not paying your debt will not more harm than good. Do not forget that the more you delay paying your debt, the more interest you will incur.
If you feel you can’t pay the debt and have no way of solving the issue, call your bank and negotiate the terms. Ask them to either lower the interest rate or for your debt to be forgiven.
Making late payments will damage your credit score. Your credit card has a due date and, by all means, try and pay before that date. Otherwise, it will hurt your credit score. As such, get to know your due date and plan accordingly. If you have issues remembering dates, set reminders either on a phone or calendar that you can easily access.
Terms And Conditions
Most people also make the mistake of not reading the fine print carefully. It is essential to know precisely what you are signing up for. By doing so, you will know what you are getting into and also know what to do in case you are faced with any issues. Reading the terms and conditions of your credit card can help you avoid unnecessary fees and charges.
Managing a credit card requires self-discipline. If you learn this discipline, you will enjoy your credit card. More than anything, it is essential to keep your balance in control and within your financial means.