Do You Make These Common Credit Card Mistakes?
When you first obtain a credit card, being able to pay for your everyday items and earn rewards while doing it might seem like the perfect solution. Yet that little plastic card can be detrimental to your credit if you aren’t careful.
If you are uncertain what your credit score is, you can check it with a credit reporting agency. You can also reduce your chance of having a low credit score by avoiding these common credit card mistakes.
Choosing The Wrong Card
One of the biggest mistakes you make with a credit card can occur right at the beginning.
With so many different cards available with different perks and rewards, you should choose wisely for what you want to use.
If you love to travel, consider applying for a card that allows you to cash in points for free air travel or hotel stays.
Not Reading The Credit Card Agreement
Very few people truly enjoy reading the terms and conditions documents, as they are often difficult to understand. But skipping over the fine print could cause you to fail to fully understand your credit card. This document will contain information like expiration dates for rewards and offers, any fees you might have to pay, issuer policies and much more. Taking the time to read these documents can help you utilize your card fully.
Never pay your credit card bill late. Put the due date in your calendar, and set multiple reminders to ensure you are paying on time. Late payments can cost you extra money in fees, and if you don’t pay your bill within 30 days, it will also negatively impact your credit score. The longer the bill goes unpaid, the higher your interest rate could go.
Maxing Out Your Credit Card
Charging too much on your credit card can be detrimental to your credit score. Strive to never charge your credit card balance beyond 30% of the credit limit. By not maxing out your credit card, you never have to worry about over-the-limit fees and the penalty interest rate. By maintaining a good credit card balance, it can help keep your credit score healthy and make your monthly payments more manageable.
Not Checking Billing Statements
Checking your monthly statements can be a bit time-consuming, but it is still necessary. You could be missing billing errors or signs of fraudulent activities. These issues can have significant consequences, including lost money, lower credit scores and more. Therefore, you should check your statements every month as a precautionary measure so you can take action as soon as any questionable activity occurs.
Having a credit card can be a big responsibility, but by avoiding these common credit card mistakes, you can make the most of your card.
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