A credit card can be a great asset, both in terms of a pinch and building up your credit score. However, there are mistakes that can spell failure and can cost you much more than losing money. These mistakes may not be immediately apparent and they can be made quite easily. Unfortunately, many people make these mistakes each year.
These mistakes can easily be avoided by adhering to the advice below. By following these easy to follow steps and advice, you can ensure that the process of applying for a credit card goes smoothly. Don’t be caught unprepared or like a fish out of water.
Using Too Many
The rule of thumb is to have only as many credit cards as you actually need. It can quickly become a juggling act of trying to make the payments and you can easily be tempted to spend more than you can pay. You don’t want to be caught in a place where you are struggling just to get by and make the minimum payments.
Making the Minimum Payment and Paying Late
If you have a very high balance, making the minimum payment can mean that you are stuck paying only interest and you may be paying for years to come. The easy way to avoid this is to avoid having very high balances and paying on time. If you miss a payment, it can lead the way to higher interest rates, a fee, and a negative impact on your credit score.
Not Understanding What You are Signing on For.
If you don’t carefully read the terms and conditions of your credit card agreement, you may be paving the way for failure. A lot of credit cards have introductory rates that pave the way to higher rates and in addition, there may be substantial fees for balance transfers and other types of limitations that may be very undesirable.
Choosing the Wrong Card for the Wrong Reasons
You may be tempted to choose a card with a rewards program, or something similar. Credit card companies understand that these options are very alluring and many people fall into the trap of trying to max out their reward potential. Ask yourself if it is truly worth it. You may be able to get what they are offering at a much lower price.
Not Paying Attention
You need to carefully monitor your monthly statements and transactions to ensure everything is in order. You want to proactively search for suspicious activity to ensure that you are not a victim of identity theft. Don’t trust the credit card company to do the job for you.
Every year, thousands of people find themselves in credit card ruin because they made too many mistakes, or didn’t look for the warning signs. This has cost them, both in terms of lost money and a devastated credit score. If you are at the beginning process of applying for a credit card, than following the above steps will ensure that everything goes smoothly.