subject: Five Credit Card Mistakes to Steer Clear From by:Allisson May [print this page] Surveys show that bad debt and credit card charges are directly linked to each other. Therefore, how you use your credit card plays a big role in staying away from serious debt problems. Here are five mistakes that many credit card holders often commit that you should steer clear from:
Sticking with the minimum due payment. Most credit card holders pay only the minimum due on their cards instead of paying off their entire balance. Yes, you may be allowed to submit only the minimum due payment each month but doing so increases your risk of falling in the debt trap.
Not only will you incur additional interest fees but it would also take you a longer time to complete your payments. Imagine saving the extra 10% to 20% interest charge from your bill each month.
There is no truth that you need to carry an existing balance in your account to raise your credit score. What raises your credit score is how timely you are in paying off your debts.
Charging petty expenses on your credit card. Unless it's really an emergency, don't use your credit card for every day expenses. If you can pay for it in cash, don't charge it. The habit of frequent charging presents two dangers.
First, there's a greater tendency that you'll spend more when you're using a credit card while shopping. Second, there is the possibility that the items you purchased for only $10 could end up costing you $20 or more because of the added interest and late penalty charges.
Taking out cash advances. Using your credit card to get cash advances is a BIG no! Most credit cards charge a much higher APR on cash advances plus cash advance charges. And since they're not covered by the grace period, you instantly get billed the moment you take the cash.
Your credit card company may also send you "checks" or "gift certificates" in your mail. You may be enticed to use them thinking that it's a treat or special privilege from your credit card issuer. But watch out!
If you read the fine print, you may be surprised to find out that these checks are also considered as cash advances which translate to high interest fees and cash advance charges.
Using credit cards to pay off medical bills. Financial experts recommend acquiring your personal medical insurance to cover for emergency expenses.
Some people who do not have a medical insurance may try to charge their medical bills on their card. But charging such a large debt on your card puts you in great danger. If you're confronted with medical bills, try to find other ways to pay for them.
Ignoring the problem. Serious debt problems start out small. Some people continue to use their credit cards even if they're already having a hard time keeping up with their monthly payments. Others don't even bother to check their account or billing statements and some even try to hide when credit card companies start to call them about their debts.
This kind of behavior would not solve anything. Even worse, it creates a much bigger problem. If you're suffering from financial crisis, talk to your credit card company and explain your situation. Try to negotiate for easier repayment terms such as waiving some of the charges or lowering the rates.
Avoid incurring new charges on any of your cards. Pay attention to your spending. Set a budget plan to enable you to make repayments. Be responsible and take action before things get out of control.
About the author
Allison May is a credit consultant and a writer for http://creditcreators.com/ The resource provides consumers with valuable advice and information on credit cards for bad credit,credit cards for good credit and other credit-related issues. Its main objective is to help people build good credit.
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