Credit cards have many different uses. They can be used for improving credit score or getting you through a short-term cash crisis.
Unfortunately, most people with credit cards end up making avoidable mistakes, which can cost them thousands of dollars a year.
Below are the 4 credit card mistakes almost everyone makes:
Reward cards
In recent years, reward credit cards have become very popular, and offer you great incentives to purchase certain items. However, when you don’t pay the balance off in full every month, it can end up being extremely expensive.
You see, although reward cards offer cash back or points, they usually come with a higher than normal interest rate, which means when you don’t pay off the balance you end up paying over the odds. Don’t make this mistake.
Balance transfer fees
Another costly credit card mistake is paying balance transfer fees. While this is something that was regarded as normal in the past, it is now seen as an unnecessary expense.
Most major companies now offer 0% and no transfer fees on balance transfers, which means if you do come across a company trying to charge you for a balance transfer you should avoid them altogether.
Canceling a credit card account
This is quite possibly the biggest mistake that people make with credit cards. Quite simply, if you don’t use your credit cards anymore then it may seem like a good idea to cancel them altogether.
However, this is not usually a good idea, as it can negatively impact your credit rating. You see, one of the major factors that determines your credit rating is the amount of credit you currently have available, so once you cancel a credit card account, that credit disappears for good.
Consider keeping credit card accounts around that you no longer use. You don’t actually need to keep the credit card, as you can cut it up so you are not tempted to use it.
Only paying the minimum
Only paying the minimum amount on your credit card each month is a major mistake, and one that should be avoided at all costs.
When you do things this way, you are not really paying off your credit card, and it can actually end up costing you hundreds, if not thousands of dollars until you eventually pay off the balance.
Instead, do everything you can to pay off the full balance of your credit card every month., and avoid making unnecessary purchases that you can’t really afford.




