There are many types of modes of payment available in the market all over the world today. This includes cash, credit cards, debit cards, e-payment, net banking, and payment apps. Credit cards are commonly used all over the world and millions of people make monthly payments through credit cards. A credit card is a card given by the bank that can be swiped at purchase points to make payment and the credit card bill has to be paid at the end of the month. The payments made through credit cards are done on a credit limit given to the customers by a bank. But while using a credit card we have to be a little careful and there are many mistakes that people make while using this mode of payment. Using a credit card is also about being able to protect the credit score, making payments and adopting smart credit card habits. People commit bad credit card mistakes and these mistakes can be easily avoided as people can have a healthy relationship with their bank and their credit cards. The following are some of the common credit card mistakes all over the world:
Late Payment of Bills
It is very important to pay all the credit card bills on time. Failing to pay a credit card bill or paying the credit card bill late negatively affects the credit score which is an important parameter that determines the interest rate and the credit limit on credit cards. Also, late payments increase the interest on the payments as people have to spent more money on their credit cards.
Not Changing Credit Card Terms
Most people have not read the fine print about the terms and conditions of their credit cards. Many people do not know that they can change the terms of credit cards with the bank. Negotiating lower interest rates and annual fees and also changing the terms of this agreement is possible.
Not Knowing the Credit Score
The credit score is very important in determining the credit limit and the interest rates that are available for any given customers. Most people get credit cards without knowing their credit. They later regret this when they get their credit card bill and they have been charged a high-interest rate because of their low credit score.
Not Reporting the Credit Card being Stolen or Lost
It is very important to report to the police and to the bank about the lost or stolen credit card. That card may be used and if the credit card company is not told to stop the card, the credit card owner may be charged with the bill.
Only Paying Minimum Balance Payment
Only paying the minimum balance on payments lets people pay only a small amount that is due to the credit card bills. However, the due payment keeps accumulating on the credit and the interest on accumulating payments also keeps increasing. This then leads to a large credit card debt that people regret later.
Spending More Money Than People Have
People do not realize the amount of money that they spend as credit cards are easy to use and actually paying cash for purchases makes people more cautious. Maxing out credit cards and then not being able to pay credit card bills is a common mistake that people regret.
Having Too Many Credit Cards
A common credit card mistake is not being able to keep track of the money spent on credit cards. First applying for too many cards at once increases the chance of reject from the credit card company and then using multiple cards makes people lose track of their spending which they regret later when the credit card bills arrive.