The great credit card can be a great friend or an unforgettable foe. Many people get caught up in spending more than what they can pay back. It becomes a never ending cycle of financial turmoil.
There are advantages of having and using credit cards responsibly. This can range from cash back and travel rewards to using ten to rent cars or hotel rooms. They can be a lifesaver for a purchase gone bad too.
Some mistakes that cardholders make, and may not be aware of are:
1. Paying late fees
Its not to say you should not pay your credit card bill,but a lat fee should never be paid. One reason is you can have your due date rearranged to align with the time you need to pay. For example, if you get paid on the 2nd of each month so the credit card company will issue your bill to coincide with that timeframe. Now, no more tardiness to pay the bill.
Secondly, if you ask nicely enough the company will waive your late fee. Most credit card companies are nice and will assist you. One must first try, so be certain to ask.
This is easy revenue for the company. The costs range from $25 to $35, so it adds up quickly. If you are finding that you are asking for the waiver often then this is a sure sign of a budget problem.
2. What is interest?
Many people do not know what 18% or 29% interest means and how it breaks down for their financial interest. Small balances can grow to be gigantic debt ducking monsters. Ten years of paying an interest rate can amount to thousands in debt. Consistently carrying a balance should not be done because of the interest rate. For those wanting to pay down a debt it is best to toggle with balance transfer cards. The best balance transfer cards offer 0% interest for spans of 2 years.
3. Get Something Out of the Deal
If you are not gaining then you are only existing. Being a special member of the world of using credit cards has so many benefits. Which are you using and taking advantage of? There are bonuses for gas and grocery charges, cash back offers, and even sign on bonuses. Fore a family the rewards can stack up.
Don’t forget that with signing up comes the risk of high APR on balances that are not paid in full. Being diligent is key in order to take advantage of rewards.
Where are you in the credit card game? If your monthly statements are full of zeroes and you gain with rewards and fraud protection, then you are on the winning side. If no, then its time to change up your credit card game approach or give up using credit cards altogether.