3 Credit Card Mistakes to Avoid

Are you thinking of getting a credit card to combat your January debt? Maybe you already have one but are unsure of how to “use it properly”? While different types of credit mistakes can hurt your wallet, some blunders are more costly than others.

 

 

Credit cards are convenient and can be useful in a financial emergency. However, when not used properly, credit cards can become a source of stress. There are some credit management behaviors you should be careful not to engage in. There are plenty of pitfalls credit card users can fall into that can wind up costing them a bundle; Here are the three worst credit card mistakes to avoid.

1. Being late on payments

It’s vital to make your credit card payments in full and on time, every time. Not only will it add late fees to your bill, but it will drag your credit score down (Your payment history accounts for 35% of your overall FICO score), which can mean you’ll have more trouble applying for loans or credit cards in the future.

 

It’s important to contact your lenders if you think you might not be able to make a payment on time. Some credit card issuers may work with you by moving your due date to later in the month. Address any issues concerning late payments as soon as possible. (You can set up automatic repayments to cover the minimum payment on your credit card bill each month to avoid this.)

2. Paying the minimum monthly payments

Not paying off your balance in full each month will just dig you deeper into debt. Sure, paying the minimum means you’ll be able to avoid late fees – but unless you clear your entire bill each month, you’ll get hit with interest on the balance that carries over. It’s best to pay more than the minimum so you can pay off not only the principal but also the interest.

 

Make sure you’re never spending more in a month than what you can comfortably afford to repay. And when you set up automatic payments, think about setting them up to cover your whole credit card bill as opposed to the minimum.

3. Taking cash advances

Unless you’re experiencing a major emergency, taking a cash advance is not the best choice and should be avoided where possible. This is because credit card companies charge even higher interest rates on cash advances than they do on normal purchases. What’s more, with no grace period you’ll probably have to start paying interest right away.

 

Avoid cash advances by using your debit card where possible as this is usually a fee-free way of getting the cash you need.

Final thoughts

The key to getting the most out of your first credit card is to use it wisely. Despite the dangers listed above, having a credit card can be your first step to building up a good credit history, which can set you up to get approval for things like a home loan later. There are also great rewards on offer (like cash back bonuses and airline miles) that are definitely worth keeping track of.

 

In summary, if you can’t pay off your credit card balance in full each month, don’t use your credit card – you’re essentially robbing your financial future.

Installment Loans from TLC Loans

If you’ve run into financial trouble over credit card payments, Total Loan Company specializes in helping people seeking a personal loan who are turned away by traditional banks.

 

(see why you should always choose a personal installment loan over a PayDay loan here.)

 

As a highly rated lender, the TLC team has a long history of working in the consumer finance industry. Most of all we understand the challenges facing our customers and their families.

 

We know there are times where you may need an installment loan to get you through a tough financial time. TLC is here to help! If you live in the states of Illinois, Missouri, South Carolina or Utah, apply today and get your money tomorrow. Have questions or concerns? Contact us here today for any questions regarding the application process, we’re here to assist you 24/7.