Before you rush out and get a credit card, there are some things that you will need to know. Owning a credit card comes with a lot of responsibility. Also, there are some things that you should avoid doing with your credit card. Today, we are going to look at five credit card mistakes to avoid.
Five Credit Card Mistakes to Avoid
This is one of the most important mistakes to avoid. Being late with your credit card payment could put you in hot water and risk damaging your credit score. Additionally, you will likely have to pay a large penalty fee for being late. Most credit card companies charge around $30 USD for each late payment you make.
Only making the minimum payment
Another credit card mistake to avoid is paying only the minimum payment. By doing so, you are paying higher finance charges and inflating the price of your original purchases.
Taking out cash advances
When you take out cash advances, the money you receive will end up costing you more. Credit card companies charge higher interest rates for cash advances that you will have to pay back. Also, some credit card companies charge a special fee for getting cash back which can add to the debt you owe.
Closing your account after you pay it off
After you finally pay off a credit card, it can be tempting to close your account and cut up your card. But this can have a negative effect on your credit score, and it may make it harder for you to get credit later down the road.
Maxing out your card
It is never a good idea to use all the available credit on your card. This can lower your credit score and send the wrong message to your credit card company.
Did you experience a credit card mistake? Share it in the comments. Help others improve their credit score.