The usefulness of credit cards depends on the emotional response one gives to it. For those who insist on the necessity of credit cards, they are an important component of a good credit standing. Others insist that we need to get rid of anything plastic that fits the wallet. There are also those who fall in between - we carry our credit cards with us, use them, and later wish we could go back and fix the mistakes we do as cardholders. The unwise use of your credit cards can get you entangled in mistakes you could have avoided.
Mistake # 1. Maintaining more than three credit cards.
It feels so good to have a credit card. It is a lot better to have two cards. Having three credit lines will improve your credit standing. If I were you, you have to stop there. With anything more than that, you are setting yourself up to a great fall. Holding a lot of cards will gear you up to a spending spree. With greater credit limits come greater temptations.
Mistake # 2. Getting suckered by introductory rates.
How would you react if you find fifty pre-approved, zero-interest credit card offers in your mailbox? These offers don't come without a catch. These introductory rates are marketing strategies to make you sign the offer without making a wise evaluation of the terms of agreement first. Soon, you find yourself unable get free from sky-rocketing interest rates. Make sure that you understand the entire cardholder agreement before you sign up.
Mistake # 3. Paying beyond the due date.
While it is true that occasional late payments are understandable, paying consistently days behind the schedule can adversely affect your credit score. You will be made to pay late payment fees. These fees sum up six months of penalty interest rates, usually ranging up to 29.9%. If a late payment is inevitable, make arrangements with your card issuer because they usually work with you, especially if this is only your first late payment.
Mistake # 4. Spending beyond what you are able to pay.
Don't be tempted to think that your credit card is an access to free money. When you carry a balance from month to month, soon you will reach your credit limit. When you go overboard, you will be subjected to unnecessary over-the-limit fees. Then you drop your credit score. So do everything you can to avoid doing this.
Mistake # 5. Disregard or ignorance of your monthly statement.
Your monthly credit card statement reveals a lot. By disregarding or ignoring your monthly statement, you might end up paying unauthorized charges and erroneous billing. Some scammers may even take advantage of the fact that you won't notice small purchases. So don't let anyone abuse your credit. Go over your monthly bill to make sure that everything is well.
