Avoiding Common Credit Card Mistakes

by MarketProSecure UK

In today's world the lure of living a good life constantly draws us towards extending a larger part of our daily existence to credit. Once you're aware of these common mistakes and exercise caution against them, you'll be much better of. Here is a list that should help you avoid these common yet costly credit card mistakes we often make.

Read and understand the card agreement

According to various surveys studying the average American, the bulk of credit card users did not go through the terms of credit cards in their possession. This is wearisome especially considering the fact that numerous credit card companies will hide away important facts in their terms hoping you don't find these out. The advertised standard interest rate may not apply to cash advances and balance transfers, and some card issuers penalize you by hiking interest rates on your outstanding balance after making a single late payment. When it comes to choosing credit cards it pays to stay informed even when you don’t expect to carry a balance.

Scrutinize your monthly statements

Going through monthly statements will give you an idea of your expenses as well as a timely warning to notice identity theft and fraudulent transactions before they get out of hand. With a growing number of credit cards in your wallet, it might become more difficult to keep an eye on your monthly statements. This is why you should use credit cards only when you're sure of being able to manage them properly.

Do not use a credit card to pay off another

Robbing Peter to pay Paul will not work in this case. Rather than incur debt on a credit card to pay off another, consider transferring high interest debt to a credit card charging a very low balance transfer fee.

Send payments early

Sending payments late is an expensive joke that can help build a solid pile of debt in no time. Most credit cards will hike up your interest rate after a single late payment so it’s never a good idea to pay late when you pay early.

Keep a handy number of credit cards

Although it's not uncommon to see a friend having 15 credit cards, you wouldn't be doing yourself any good to follow suit. Sign up to as many credit cards only when you're sure of your ability to send payments early and keep an eye on these accounts. Keep it in mind that having a huge number of credit cards in your wallet would mean more payment dates for you to remember.

Do not patronize unsecure websites

A website using Secure SSL technology should have the SSL logo displayed on some part of the site. Some browsers will notify you when you're communicating over secure channels. As a rule of thumb, always check for the SSL logo before registering for a new credit card and making online purchases. Take extra caution to ensure you transact with trusted sites.

Don't make purchases for a friend

You might be tempted to do this once in a while but it pays to think of its consequences in event your friend can't pay back. Do not let someone use your credit card, rather, order an additional card that allows you to set spending limits.

Sign Up for Fraud Alert

It's wise to sign up to a fraud or identity theft protection program if your credit card company offers one. At the very least you should register to receive mail or text alerts on every transaction. This way you'll be aware as soon as a fraudulent transaction is recorded on your account without waiting for a monthly statement.

Published: October 22, 2009

Similar Articles and Information Resources:

Bookmark this page

For more new articles see our Personal Finance Learning Center section.