Hello, Dinks. Do you have a credit card? Do you use it often? I currently have two. I’m not using credit again until I’ve paid off my debt. When I do start back using it, I don’t plan on getting back in debt or making any mistakes. Today I want to go over a few mistakes that people can make with their credit cards. Make sure you don’t make any of these errors.
Use it for everything
In my opinion, you shouldn’t use your credit card for everything, you should only use it for certain purchases. The only way I would suggest using your credit card to pay for everything unless you have the money to pay the credit card off every month. A lot of people can’t afford to do it. If I were you, I’d only use my credit card to pay for small bills or purchases.
Not paying it off monthly
The next credit card mistake that people make is that they don’t pay it off each month. If you don’t pay it off monthly, you will be charged interest. Depending on how your credit is you may have a very high APR. A couple of years ago I was paying nearly $80 each month in interest on one of my credit cards. That’s one of the reasons why I said don’t use your credit card for every purchase. You may not be able to pay it off each month. I know I wasn’t able to. By paying your credit card off monthly, you will never see an $80 interest charge.
Using your limit
The next credit card mistake that people make is that they use their full credit limit. That’s a huge no-no. If you’re trying to have a good credit score, you shouldn’t max out your cards each month. You should only use 30% of your credit. Credit card usage also counts for 30% of your FICO score which is a lot.
Using your credit card over unsecured internet networks
Another mistake that people do is use their credit cards over unsecured internet networks. If the web network is not secure, you may want to think twice about using your credit card online at the time. Hackers can get your information and mess things up for you if you use an unsecured network. Once they get your credit card info, they can go on a shopping spree. Unfortunately, I have had this happen to me. I was able to get the money put back in my account, but it was a scary situation.
Not having a card with rewards
If you are going to have a credit card, you might as well have one that has some good rewards. I read about people getting free flights all the time because of their credit card rewards. When I start back using credit cards, I plan on getting one of those types of cards. Airline flights are not the only type of reward cards out there. There are also credit cards that allow you to get cash back and fuel rewards.
Using it more when you have a credit increase
The next mistake that some people make is that they start using their card more when they get a credit increase. Don’t fall into that trap. If you’re not careful, you can get into a lot of debt that way. I will never forget when my credit limit increased from $3000 to $4000. You would have thought I won the lottery. I used some of that “new credit” on some clothes and a flight. Man, was I stupid. Don’t do what I did and use your credit card because you can. Remember, you have to pay that money back.
Don’t read the fine print
The last mistake that some people make is that they don’t read the fine print. Some of the things that you must pay attention to are the amounts that you will be charged for cash advances and balance transfers. You also should know the APR before you make your first purchase.
Have you ever made any of these credit card mistakes?