Now, for many of you, rampant usage of credit cards has become a way of life. Many of you now prefer to carry plastic money instead of liquid cash. Though some of you use credit cards wisely, it is also seen that many people use credit cards instinctively.
If you don’t pay much attention while using credit cards, you may find yourself falling into a financial problem. This puts financial as well as mental stress on you.
To avoid such stress, you should be aware of some common credit card mistakes that you often commit.
Read carefully:
1. Using credit cards for buying necessary items
You should follow a realistic budget. It is foolish to purchase necessary items by using a credit card.
Random usage of credit cards and piling credit card bills may cause credit card debt.
If you are not able to pay off your credit card bills on time, then you will incur interest on that purchase. Remember, credit cards should be used only to meet the expenses of some unintended contingencies.
2. Keeping too many credit cards
One of the common financial blunders that you often commit is keeping too many credit cards. Holding too many credit cards is not a good sign. This may provoke you to use credit cards for unnecessary purposes. You may get into a credit card debt trap shortly.
3. Making late payments
Making late payments on your outstanding debts is indeed a very big mistake that you commit quite often. In this case, you need to make late payment charges. Also, it has serious negative implications. It adversely affects your credit report and damages your credit score badly. This, in turn, jeopardize your prospects of getting better terms for future loans.
4. Using credit cards for paying medical bills
Medical costs are huge in the country. If you indeed face difficulty in paying your medical bills, you can negotiate with the hospital whom you owe money. But it is recommended that you should not use credit cards to pay your medical bills.
5. Ignoring monthly statement
Take the credit card statement seriously. The statement shows you whether or not the charges documented are correct. So, you can check whether or not there is any mistake. Moreover, in this era of increasing identity theft, what you need to do is to check the statement minutely. And the sooner you do it, the better it is for you.
Checking the credit card statement helps you to know whether or not you have exceeded the credit limit as well.
6. Taking out cash advances
This is a very costly thing that you frequently do with a credit card. The fees associated with cash advances are very steep and the rate of interest is also very high.
Don’t take out cash advances with a credit card, unless and until there is an absolute emergency.
Lastly, using a credit card is not bad. If the credit cards are used responsibly and sensibly, they can do a lot of good to you.