Four Major Credit Card Mistakes Nearly Everyone Makes
Credit cards can be helpful for the unexpected expenses that come up once in a while. However, there are some credit card pitfalls that can make your financial situation worse off than before. Credit cards are a leading factor in most cases of severe debt. Keep yourself in a good financial situation by avoiding these credit card mistakes.
Treating Your Credit Like Free Money
Credit cards should be used for emergencies, not luxuries. Take the cost into careful consideration before you purchase anything with your card. Ask yourself if it’s something that you truly need and how you will pay it off. If you use your card for a large purchase, devote every spare cent to paying off the balance. Remember that if you can’t afford to pay off the purchase within a reasonable timeframe, you can’t really afford it at all.
Not Examining Your Statement
It’s easy to forget how much money you spend with a credit card unless you look at your statement every month. In addition, you need to see if any fraudulent charges have been made. Credit card companies do their best to combat identity thieves, but credit card fraud still occurs from time to time. When it does, it’s crucial that you dispute the purchases as quickly as possible.
Paying Off One Card With Another
Some people think that if they can get one more credit card to pay off their debts, they can get back on their feet. The problem is that this strategy only replaces old debt with new debt. Furthermore, you can end up even worse off than before if the new card does not give you enough credit to pay off your old debts.
Thinking That Introductory Rates Last Forever
Credit card advertisements draw a lot of attention to their low introductory rates. Many people get so excited over this prospect that they don’t read the fine print. The key word here is “introductory”. Once that introductory rate expires, you can be trapped with exorbitant interest and fees.
There are plenty of reasons to have a credit card. Just be sure that your spending habits don’t put you into serious debt. By sidestepping these mistakes, you’ll do a great deal to prevent credit card costs from getting out of hand.