Credit cards can be great when you use them the right way. From rewards to getting other types of bonuses, what’s not to love about these pieces of plastic? Sure, there are people that are haters, but what I’ve come to find out is that these people are the same ones that just don’t know how to manage their own finances.
There’s a good chance that you have a credit card in your wallet today. If this is the case, I wanted to show you 5 mistakes that many people make. By avoiding these mistakes, you’re going to find that you can make yourself a better credit card user.
#1 Not reading the fine print: There is so much fine print with a credit card application. Everything from the introductory rates to the interest rate, you’re going to want to make sure you know how long your interest rate will last, as long as your rate is going to change. The more you know, the more you will feel comfortable with your card.
#2 Taking out a cash advance: This is honestly one of the worst things that you can do. People tend to think that it is a great option to take out a quick, fast loan, but what they don’t realize is what they are going to be charged in terms of interest rates. A cash advance can easily set you back 30% in interest.
#3 Not paying the bill or avoiding it: Let’s say that you don’t have the money to pay off your credit card bill. If you can pay off the minimum, at least attempt it. As long as your bill isn’t through the roof, you’re going to find that you can easily pay the minimum. Never just ignore your bills as this is going to kill your credit score in the long haul.
#4 Not knowing how rewards work: There are some great rewards out there when it comes to credit cards. What you’re going to find out is that if you don’t pay your bills off in full, you’re not taking advantage of the rewards. The reason is because you’re going to be paying more in interest than the rewards coming back. Pay your bills off in full and you can avoid the interest rates all together.
#5 Getting too many cards: You really only need 1 credit card. There’s no reason to sign up for 100s of them. Sure, a free t-shirt may be tempting, but you may be bound to use more than one in the future. The chances of them snowballing and adding up fast can happen, so be sure to avoid this one!
As you can see, many mistakes are common sense. Just use your head and see what’s best for your wallet. Treat your card like cash, pay it off in full each time, and there should be no worries!