One or Two a Day

When you’re dealing with credit cards, you’re playing with fire. Unfortunately, there are plenty of people out there who don’t realize that, and make all sorts of dangerous mistakes with their credit cards every day.

Paying Late.
Paying late is a big mistake for an awful lot of reasons. You will almost certainly be charged a late payment fee, and your late payment will go on your credit report for everyone to see. You may also find that you lose any good rate you had, and your debt is automatically thrown onto the very worst rate the company offers.

Being Taken in By Rewards.
It is never, ever worth getting a higher-interest card simply because it offers some kind of loyalty points, flight miles or whatever. All ‘rewards’ do is pay you off with your own money to make you feel like you’re getting something for nothing. You’re not.

Collecting Cards.
Seeing some people opening their wallet or bag is a scary experience. It looks like they have about a hundred credit cards in there, some of which they haven’t used in years. They have trouble keeping track of all the different cards, balances and interest rates. Don’t be one of these people. You should limit yourself to a maximum of three cards at a time.

Maxing Them Out.
Your limit is just that: a limit, not a minimum! Whatever you do, don’t get a card and immediately spend your whole limit. This looks very bad. It is better to spend about halfway regularly and pay it back. Wait for the company to increase your limit (which they quickly will), and then you’ll get that extra money without the stigma of having a maxed-out card.

Not Reading the Terms and Conditions.
Finally, as ever, don’t sign anything you haven’t read! Pay special attention to any future increases in rates, and what kind of fees you can be charged.

Labels: Lifestyle