Credit cards have become an essential part of our lives. While they offer many benefits when used wisely, making mistakes can lead us into debt traps. In this article, we will explain six common mistakes people make when using credit cards and common mistakes to avoid when using your credit card.
Falling into the Minimum Payment Trap
Many people pay only the minimum amount due on their credit card bills, thinking it is enough. However, this can lead to increased interest charges and more debt. Always try to pay the full balance of your bill whenever possible.
Impulsive Spending
Using credit cards for impulsive purchases can be another mistake. Overspending without careful consideration can strain your budget and max out your credit limit. So, think before you swipe your credit card.
Withdrawing Cash from ATMs using Credit Cards
Withdrawing cash from ATMs using credit cards can incur heavy fees and immediate interest charges. Instead of resorting to this, consider other options if you need cash.
Using Balance Transfers Without Understanding Fees
Using balance transfer offers without understanding the associated fees can be risky. Banks may charge GST and processing fees, so make sure to read the terms carefully before availing of this option.
Ignoring Terms and Conditions
Many people overlook the terms and conditions of their credit cards and end up facing unexpected charges later. Take the time to understand how your credit card works and what the terms and conditions.
Missing Payments
Not paying your credit card bill on time can result in late fees and additional interest charges. Always try to pay your bill on time to avoid these penalties.
Using a credit card wisely can offer convenience and benefits, but it is very necessary to avoid this 6 common mistakes.
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