If you own a credit card, there are some specific
things that you should NEVER do!
Here’s our list of the top ten
things to avoid with your card.
1. Don’t choose a card with a fee, high interest
rate and poor customer service. It seems obvious,
but a high interest rate can add up even quicker
than you think. In addition to that, if you don't
have a quality system of customer service backing
you up, you are bound to let that large amount continue
to accrue for lack of knowing better.
2. Don’t make your payments a day late. In
addition to the interest rate on your card, credit
cards come with finance charges per cycle and late
fees. The average past due fee is about thirty dollars.
Imagine how quickly that adds up, especially when
you're not even getting anything in exchange for
that thirty bucks. If it adds up enough, these additional
charges can put you over your limit, which not only
tarnishes your record, but adds an over the limit
fee per cycle.
3. Don’t pay only the minimum payment. It
is easy to pay that twenty bucks a month that your
credit card says that you have to pay. Especially
if times are tight and you're not really looking
too far ahead. Remember, however, that every month
that you're taking to pay off a purchase comes with
additional fines and fees that can double the price
of your initial purchase.
4. Don’t accumulate all the cards you can.
It's easy to get that store card at the counter,
especially when making a large purchase or splurging
on something you don't really need. Promises of
"save ten percent today" are sometimes
all it takes to fill up a whole wallet with gas
cards, and cards to specific stores. It is easy
to lose track of payments and charges with several
different cards. You're much better off having one
or two universally accepted cards like Mastercard
or Visa. This way you can track your purchases more
efficiently, and you're more likely to make timely
payments.
5. Don’t spend today, and then worry about
how to pay it off tomorrow. This is a very easy
way to get into trouble. Making purchases that you
wouldn't normally make because you have the extra
"money" in your wallet makes it very easy
to forget that you will have to pay off that amount.
It also leads us nicely into our next bullet-point.
6. Don’t use credit as additional income.
Don't fool yourself into thinking that the money
on your card isn't money that you have to pay back.
Credit should be used as another way to spend money
you already have. Don't make purchases that you
can't afford, and always have a plan to pay back
a purchase within ninety days. This is an easy way
to keep up with your credit rating.
7. Don’t share it with a friend who has none.
Before you vouch for someone else, make sure that
you can trust them with your credit rating. If you
co-sign for something, and they don't pay up, it
will negatively affect your credit rating, too.
8. Don’t use cash advances from one card
to pay another. This should be a clear sign that
you are in over your head. If you have gotten to
this point, you should really consider seeking help
from a debt counselor.
9. Don’t hide debt from your spouse. This
extends to parents, roommates, and anyone else that
you share fiscal responsibility with or feel accountable
to. Hiding it from these people will only make it
fester in your mind, lead to arguments, and unfortunately
can end relationships.
10. Don’t ignore the problem. It doesn't
go away. In fact, it just gets worse. So if you
have a credit problem, take steps to fix it, even
if that means bringing in the experts.
