10 Worst Credit Card mistakes
There are a lot of mistakes that you can make with your credit cards. The following are the ten worst credit card mistakes that people commonly make.
1. Using your credit card to make everyday purchases. Remember when you use your credit card you are borrowing money. It does not make sense to borrow money to make everyday purchases; they should be paid for with cash or a debit card.
2. Making the minimum payments on your credit card every month is a recipe for disaster. The minimum payment barely covers the interest. Virtually none of the money that you pay will go toward reducing the amount that you owe. This is great for the credit card company since you will be in debt for a long time but it is not so good for you.
3. Late payments will really hurt your credit rating. Every time that you make a late payment it will be reported to the credit bureaus. That means it will cost you more to borrow money in the future.
4. Maxing out your credit cards is not a good idea. Not only does it make it very likely that you will end up having a problem with credit card debt but it also hurts your credit rating
5. Applying for too many credit cards can hurt your credit rating as well. Every time you apply for a card it will appear on your credit report. This is an indication that you may be seeking more credit than you can afford.
6. Having a credit limit that is too high can be a problem as well. This is another thing that can hurt your credit rating. It also makes it very easy to get yourself into trouble with credit card debt.
7. If you do have too much credit you need to be careful about how you to about closing any credit cards that you don't need. If you just cancel them all you will hurt your credit. You need to choose the right cards to cancel and do it slowly.
8. Not knowing the interest rate that you are paying on your credit card is another serious mistake that a lot of people make. Most people sign up for a credit card because it offers a low introductory rate. Do you know what the rate is when the introductory period ends?
9. You have to protect your credit card information. There are a lot of thieves out there who will happily run up charges on your card if they can get a hold of the number. It is essential that you protect this information.
10. The biggest mistake that you can possible make is to allow your card to be charged off. This happens when the credit card company believes that they will not be getting paid. If it happens it will destroy your credit for years.