The Top Ten Worst Credit Card Mistakes Part 2

Post by Sharat on May 26, 2009 · Under Business News, Featured Articles, Hints and Tips, Personal Finance, banking, credit cards, interest rates, loans, personal loans · Comment

In the second part of our two part piece on the ten worst credit card mistakes, we look at mistakes numbers 6-10, and see how easily they are avoided, by doing something as simple as reading credit card statements as soon as they arrive.

6. Making minimum payments

Often the an obvious mistake that consumers and borrowers make when using their credit cards is paying only the minimum amount required for their credit card.

Borrowers should endeavour to pay off the entire balance, and if they cannot do so, that at least more than the minimum monthly payment. Paying off only the minimum perpetuates the debt and the borrower ends up paying far more interest on the amount than is necessary. The longer the debt is carried for the more interest is paid.

7. Paying your bill late

Mistake number 7 can easily be avoided. Though making a late payment is better than no payment at all, it still negatively affects the borrower’s credit report, making it more difficult for the delinquent borrower to obtain finance on good terms a later date. The card issuer will also levy charges for late payments.

8. Ignoring your monthly statement

Avoiding late payments is easy and can be done simply by regularly checking monthly card statement. Not checking credit card statements is a serious mistake and result in self inflicted wounds on borrowers or consumer, since they are unaware of how much is owed on the particular card is, when its payment is due and what interest and other charges are being levied by the card issuer.

If there is any discrepancy between what the borrower believes should be, and what the card issuer is charging, then the only way to be aware is to check and dispute the charge is to read the statement and do it promptly. Borrowers who query charges well after they were made, because they failed to read the statement when it first arrived will have problems. Consumers should make the effort to read their monthly statement as it arrives

9. Exceeding your credit limit

Mistake number 9 can also be avoided by simply checking credit card statements promptly. For consumers who are near their credit limit, they should start paying in cash for purchases. Exceeding credit limits invokes punitive charges which are expensive and look bad on credit reports.

10. Buying things you don’t need

Examining statements also allows consumers and borrowers to avoid mistake number 10 which is something that nearly everyone does, which is buying things we don’t need. Going through a card statement regularly allows a card holder to examine what it is they are buying and isolate those expenses that are wasteful.

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