Credit Card Mistakes You Have to Stop MakingAugust 5, 2011 - 8:58 am
As consumer credit is becoming a much more complex subject, it is very important for consumers of today to realize that there is little margin for error when it comes to applying for a new credit card. The mistakes you may have made in the past should have taught you a lesson now that credit is much harder to get.
Unfortunately there are still those who continue to make the same costly mistakes when it comes to acquiring a new credit card. Here is a reminder list of what not to do when applying for or using a credit card:
Check Your Credit Score First
Before you even submit an application for a new credit card, you need to know where you stand credit score-wise. Without having a good credit background, it can prove difficult for you to get approval for a credit card. If you have to keep applying with different providers for new credit cards, you are further harming your credit score with too many inquiries.
Find the Right Card
With so many credit cards on the market, it can be difficult to narrow down your choices. It is not wise to apply for a bunch of different credit cards. Doing so will drag down your credit score. It is always best to research the cards on the market and compare terms, incentives, and other card offerings before deciding on and applying for the card that best matches your spending habits and financial lifestyle.
Know Your Terms
Your new credit card comes with a host of terms and conditions you need to be clear about before using your credit card. For instance, you need to know how much interest you are being charged, what fees are incurred for your spending habits, and when is the payment due each month. If you overlook any part of the agreement you signed, you may find yourself having to pay more fees and penalties than you can afford.
Pay Your Bill
Not only does your credit card payment need to be on time each and every month, it should also be paid in full before the end of each billing cycle. By saving the cash equivalent of whatever purchases you made during the month, you can eliminate the finance charges as well as the imposition of penalties and fees for late or missed payments. By paying your credit card balance in full each month, you are also going to improve your overall credit score.
Face Up To Mistakes
If you ever go overboard and spend more money than you had intended, it can b easy to fall into guilt mode and not admit to the reality of the situation. However, credit card debt can spiral out of control rather quickly. For that reason, you need to work to get back on track as soon as possible and not ignore your debts. You may have to make sacrifices in order to clear your credit card account balance but do what is necessary to deal with debt as efficiently as possible before it gets out of control.
Consumers have been making credit card mistakes for years and the majority of those mistakes can be attributed to knowing too little about how credit cards work and due to some consumers’ propensity for not using credit cards wisely. Credit cards can be a very effective way to reap incentives and boost credit scores provided they are selected and used in the right manner.