6 Credit Card Mistakes To Avoid At Any Cost

Today, credit card is one of the most valuable financial tools in the hands of a consumer. When used wisely, the credit card offers financial security, convenience, and rewards. However, if one is careless while using this innocuous piece of plastic, one can easily end up mired in debt. So, we are presenting here 6 most common credit-card mistakes that we usually tend to make, and how to avoid them.

  1. Paying the minimum amount: On the face of it, it seems like a good idea to only make the minimum payment every month. However, this is not the right mental attitude.  If you are paying the minimum amount only, you will ultimately have to pay more money in interest in the long run. Paying the minimum every month will also negatively affect your creditworthiness. You can avoid cash withdrawal fees by not using your credit card at an ATM.
  2. Ignoring monthly credit-card statements: Banks send you a credit-card statement for your reference. A statement helps you find out if there are any irregularities or inconsistencies in the bill. If you go through the statement after a long time, you may not be able to identify the mistakes in the bill.
  3. Using credit card for everyday items: You should spend your monthly income to meet the expenses of your monthly necessities. If you are serious about getting your spending under control, you should never use credit card for utility bills, groceries, etc.
  4. Thinking the credit-card ‘rewards’ will pay off: Rewards programmes come with credit cards. So, if somebody is promptly paying off their credit-card debt every month, there is no harm in using credit cards to reap rewards. However, if somebody can’t pay off the money spent during the month, the rewards are not worth the interest accrued.
  5. Maxing out credit card: Remember your credit-card limit and keep track of your spending. It doesn’t look good on your report when you go over your credit limit. You can use cash to avoid maxing out your credit card.
  6. Using credit card to pay medical bills: Are you not able to pay your medical bills? Then, you should talk to your medical care provider and reach some agreement. You should avoid using credit card in order to pay your medical bills. The logic is simple: it will add credit-card interest to your medical bill. And you end up in a financial debt. 

This short write-up will help you avoid the potential pitfalls of using a credit card. By following these guidelines, you can fully enjoy the convenience and security offered by a credit card.