6 Credit Card Blunders To Avoid At All Costs

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Make sure you maximise perks and discounts every time you use your credit card.These days a credit card for anyone 18 or older, is almost a “must-have”. When used wisely, a credit card can build a robust credit history to help you get that home loan you may need further down the road
A credit card can help pay for expenses when you’re short on liquid funds. What many people don’t know is that efficient and knowledgeable credit card use doesn’t have to cost above and beyond your purchases
Credit cards can even add value to your lifestyle. Here are some missteps to steer of to help you work your credit card(s) to the max
1. Not using credit cards for perks and discountsIf you own a debit card, you know that the money you spend is withdrawn from your bank account immediately. If you don’t have that money, you can’t use the card
But using a debit card also makes you susceptible to hackers and people who can crack all your bank information. If you don’t have a credit card, you may do yourself more harm than good in the long run
Credit cards actually offer you benefits that a debit card does not, like certain perks and discounts. They are also good to use for transactions that have a higher risk factor, like online shopping
2. Not paying your credit card billThis is one of the biggest mistakes you can make because you will incur extra charges by missing just one payment. If you pay your bill just 30 days late, your credit score can be severely impacted
And if, for some reason you pay your bill 60 days late, your interest rate will skyrocket, as will the penalty rates the credit card company charges you
3. Making just the minimum paymentMaking only the minimum payment due on your bill is a surefire way for the credit card company to assume that you cannot manage your finances.They perceive that you perhaps don’t have the money to support the credit card that you have
Such a situation could result in problems for both them and you. By paying just the minimum, you could also rack up much more expense in interest over time
Try to pay even just RM10 more than the minimum to help get yourself out of the hole
Exercise restraint. If you can’t clear your monthly bill in full, don’t make that extra charge.4. Not checking your statementHow are you supposed to know exactly what is going on with your credit card account if you don’t examine what’s going on with it? That’s why you get regular statements
Only by checking your statement each month can you find errors that the company might make, or even fraudulent transactions by third parties
You may save yourself from difficulty getting refunds or fixing mistakes if you don’t wait too long but rather check it promptly and thoroughly
5. Don’t charge more to your card than you can payHaving a credit card is nice, but if you don’t think rationally about how you use it and just how realistically you can pay off that monthly bill, you can have a problem
If you are charging more each month than you can actually pay for, you will eventually wind up with piles of debt and find yourself too far behind to catch up on those payments. Think wisely before using your card on larger purchases
6. Paying medical bills with credit cardsOne big mistake that many people unwittingly make is paying medical bills with a credit card. It’s not a great idea. Smaller charges like medications are okay, but significant procedures are definitely not
Using a credit card can keep you from getting discounts on your medical costs or converting charge activity into any reward in the future. It is better to make other arrangements with the clinic or hospital where you had the procedure
In a nutshell, holding a credit card is not a tough thing to do. You can easily get by making your monthly payments and using it as you always have
But it is smart also to be aware of how to properly use it, and not fall into any bad habits. You certainly don’t want to find yourself with tonnes of debt because you made a stupid mistake
Think about what will have the most positive impact on your financial future, and you will be able to make wise decisions about using your credit card. Being aware of potential missteps will actually help you be a smarter credit card user in the future
This article first appeared in thenewsavvy.com
The New Savvy is Asia’s leading financial, investments and career platform for women. Our bold vision is to empower 100 million women to achieve financial happiness. We deliver high-quality content through conferences, e-learning platforms, personal finance apps and e-commerce stores. - FMT

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