Credit Card Mistakes You Could be Making

Tue, Apr 24, 2018

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While insurance can help you with medical, auto, and even life matters, it cannot help you with credit cards, something you can fall into a spending trap pretty quickly, or just could be missing out on the right moves to make when it comes to your credit.  Credit cards may have gotten a bad reputation in the past, but if used correctly, can actually help be a good tool to use instead of a debit card to protect your bank account, accepted anywhere without a worry of a hold putting put on your bank account, not to mention the rewards.

Not Checking Your Credit

Not only is your credit a primary factor when it comes to the interest rate on your credit cards, but also your mortgage, personal loans, and even auto insurance.  The higher the interest rate is the higher your monthly payment is, with a majority of the payment going towards interest.  By reviewing your credit report often, not to mention your credit score on monthly credit card statements, you can ensure your accounts are up to date and accurate so you can take advantage of the best interest rates on the market.

Carrying Over a Balance to Next Month

Credit cards give you a nice grace period to be able to make all the charges throughout the month and not having to pay back until next month, but if you’re unable to pay off by the statement due date, you will begin to be hit with interest, which could be upwards of 16% APR, so as the balance rises, the more can be tacked on for interest.  As your balance increases and the closer your reach your overall credit utilization your score will decrease, it’s a good idea to keep your balance as low as possible, or at least what you can afford to pay off each month.

Closing Your Account

If you have had a history of racking up credit card debt, once you finally have rid yourself of that financial burden, the first instinct may be to close your account so you don’t have to risk temptation any longer.  This can actually hurt your score as it will take away from your overall credit available, especially if you have a balance on other cards.  If you are looking to not use the card any longer you can simply cut up the card but still keep the account open.

Missing Out on Free Money

Probably the best reason to use a credit card, and one can argue for every purchase, is based on the rewards that are offered.  Even just thinking about the purchases you were going to make anyways, you can earn points for cash back, which could add up to hundreds of dollars per year that would otherwise be left on the table when using a debit or other credit card.  With the virtually endless amount of offers coming in the mail daily, you should seek out the best offer available, especially the higher your credit score continues to rise.

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