A credit card is a friendly tool for everybody nowadays because of its advantages and convenience to use. It is the best alternative to cash without occupying much space in your wallet to help you purchase your things with ease. Apart from that some of the cards along with the convenience they offer many advantages like rewards and cashback on your purchases. If you use your card responsibly that is paying off your balance right on time every month, you will not have to pay off any interest, also this will help you build your credit as you were being a conscientious user. Apparently for everyone has two faces similarly the credit card also has two-phase one is when you use it wisely and the other is the terrific side is when you don't know how to handle your finances and also when you already have debt on your head these credit cards can be a curse. Many consumers face these troubles with credit cards, especially when they do not know how to handle their finances properly. This could be totally avoided by controlling and managing your spending habits wisely also by trimming off some of the habits will make your life easier with a credit card. Avoid these 6 credit card mistakes to save your finances.
Only Paying the Minimum Balance
Never go for only paying minimum balances, as it will charge you more interest rates that will keep growing your bill every month. Instead, pay off as much as you can pay the max. to the company that will lower your interest rates. It looks good to pay the minimum balance when you have a little tight budget, but this will in the end will cause you trouble that is paying more than your real bill that’s the interest that has been cared. To avoid such things, adjust your spending’s manage to pay off maximum bills each month. It is easy to say save money, adjust your spending, and pay the highest amount but how to adjust your savings, well here are some super life-saving hacks like do not use your card to pay medical bills, check the reward you are getting on your purchase and the fee you are paying based on that plan accordingly whether it is wise to go with the card or not. Use your card only when it is necessary. In this way, you could keep your balance low, and it will be manageable for you to pay off easily at the end of the month.
The regular use of a credit card for all purposes
One of the major mistakes is people use their credit cards regularly for every little thing. People often forget that they must clear the balance bill at the end of the month that is each month they do not keep a budget or any plan and go for unnecessary purchases. Unless when you have proper budget planning and unless you keep your balance low and to clear the balance at the end of the month then you will not go into debt.
Running Behind Credit Card Rewards
Many credit cards offer rewards on your purchases, but if you do not use it wisely then it will turn into a curse. That is chasing behind the reward points is good but because of that if you do the purchases beyond the limit, do not forget at the end you have to pay off your balance if not you may have to pay interest, and if the interest is double than that of your reward then it will be a complete waste. For example, you have got a reward of 100 rupees on purchase of worth 1000 rupees but you could be able to pay the balance at the end and they will charge you interest for the whole thousand rupees which will be at the end more than the reward. Do not get into such temptations and avoid interest rates. To avoid such pay ff your balance maximum each month. avoid multiple cards, in such case, you may miss your payment, If you have cleared all your debts and paid all your balance on time then you could use your card more frequently if not try to manage the usage wisely and help yourself to stay out of debt.
Taking Cash Advances
Taking a cash advance is a great risk of acquiring interest immediately, many credit card companies send checks in email and say to use it to pay the bill, but in terms, it will be very clear that it is just a cash advance, that you have to pay but thing is, it will add interest immediately without any grace period. It is said that the interest cached on cash advances in 4% to the amount and that to there is no grace period then the interest will be a must-do to the customer. The best thing is to avoid and return to the company. Do not get into the trap of taking a cash advance, it is just a problem that comes to you in a cover that it is helping you but in reality, it is making you pay more than the actual amount. As you have no way to run away from the interest as they offer no grace period remember cash advances come with interests.
Paying Medical Bills with a Credit Card
Do not pay your expensive medical bills with a credit card, this will be more problematic especially when you are uninsured. To avoid that negotiate an agreement with the company or hospital to whom you must pay the medical bill. If you could manage the payment of your medical bills with the credit card in the end it will charge you interest. So, properly check the medical bills and make sure they are accurate, and try to understand the charges, if they are manageable with the credit card that it is a minimal bill with no hidden charges then go ahead, if you are not aware of the terms and the accuracy of the medical bill avoid the usage of the credit card to pay the medical bills.
Ignoring Debt
Never ignore the debts, as it will be adding on the interest on the debt and in case if you miss any payment then the interest rates will shoot higher, so plan accordingly and clear your debts soon, remember debts not only adds interest rates abut also lowers your credit score. So do not ignore the debt.
Late Payments
Do not make late payments, this will lower your credit score also you will be charged for late payments. Pay off your bills on time to the credit card company to maintain your credit score and to avoid other due payment charges.
Crossing the credit line
Maxing out of your credit line will hit your credit score if you do not have money do not use a credit card and damage your score. Also, the credit card company will charge you an over-limit fee, and the interest will kick your limit and you must pay more fee than the actual.
Not understanding the terms of the account agreement
Every company or bank will have terms and conditions that applied on the card when it is issued, understanding those terms is very important, without proper and prior knowledge of the terms you may face problems with the credit card. If you know and understand the terms clearly that will help your healthy relationship with the card.
Clearing all your credit card bills is not that easy it will take some time, but as soon as you clear all your debts and will try to manage and use the card responsibly then your credit card will be your best partner to use with convenience and help you enjoy it’s perks. Avoid these mistakes and use your card sensibly to keep yourself on the right path.