It is enough to receive a credit card for the first time in life so that we must assume to the act a very particular philosophy that leads us to take care of it, to maintain it, to avoid that the problems multiply.
Now, if we do not, then we will pay very dearly in money and in financial credibility. Hence it is important to avoid these mistakes that so many people make very often.
1. Pay Only the Monthly Minimum
Making only this small payment not only increases the amount of time it will take to settle the general balance of the card but also considerably increases the interest it generates. The proper strategy is to increase our payments each month; with this, we will cancel the funds of the card much earlier and we will prove to the bank that we are in conditions for greater challenges.
2. Pay on the Indicated Date
Avoid getting past the monthly due date. Make your payments on time. Establish a private system that reminds you of the expiration dates of each card you own, so that you mistakenly forget them and have to pay for it.
3. Give your Card to another Person
When we lend the credit card to another person, we immediately lose control over the purchases that it makes. In the end, we will always be responsible for paying the bill, even if that person who borrowed money “plastic” fails us or decides not to return it. Therefore, never lend your card, unless you are prepared to assume all the expenses that it generates.
4. Do not Check your Statement
If you do not check the status of the expenses and payments of the credit card, you run the risk of forgetting the due date of the monthly payment. In addition, you can also lose important announcements about changes to the terms of the card, nor can you realize in time that you have been subject to fraudulent activity. Check every time you can your billing statement if only to make sure that all charges are correct.
5. Let your Credit Card be reported as Delinquent
This is one of the worst things that could happen to your credit report and to the account itself. This happens after six months without paying. In these cases, the list of charges will remain in effect on your credit report for seven years, which may affect your ability to obtain new credit cards and loans in the future. To avoid this, settle the overdue accounts before you reach that point.
6. Delay in Reporting a Lost or Stolen Credit Card
The longer you report a lost or stolen credit card, the longer the thief will have to spend on it. Instead, if you report it before fraudulent charges occur, you will not have any responsibility if they ever occur. The advice is to report them as soon as you understand that you no longer have it with you – the best way to limit your liability to fraudulent charges.
7. Getting too Close to your Credit Line Limit
Taking your card expenses beyond 30% of your credit limit is dangerous to your overall credit score. When approaching your credit limit, you run the risk of paying commissions for excess limits and interest rates on fines. Maintain a good credit card balance so that you have a healthy credit score and a payment amount Close your credit card.
8. Cancel or Close Credit Cards
The cancellation of your credit card account will not add anything positive to your relationship with your issue. This will almost always cost you points on your credit score. Therefore, the recommendation is to leave all credit card accounts open until you are sure that closing one of them will not affect your credit history.
9. Request too many Credit Cards at Once
Every application for a credit card has the potential to decrease points in your credit history. If you apply for multiple cards in a short period of time, you may find that denials become more frequent when lenders become suspicious about such sudden increase in claims. Tip: Request a new card only when necessary.
10. Not knowing the Conditions of your Card
Knowing how the guiding company of such card handles late payments will make it more likely that you will pay your account on time. This knowledge gives you better control over the costs of your card. So you will know how you should and how you should not use it based on how your creditor responds to your actions.
Check your credit card terms at least once or twice a year. These can be found on the website of the issuer or ask for customer service.
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