Major Mistakes To Avoid On Credit Cards

Credit cards can be the most amazing credit tool even created but it can also be the worst b*&$h you have ever seen. In order to make credit cards friends of yours, we will show some of the major mistakes to avoid on credit cards:

Don’t look at your interest rate

Do you know that most people have a balance owing on a credit card but don’t even know the interest rate they have been paying on it for months… or years? You will certainly notice that furniture and other store credit cards are charging a much higher interest rate than banks. You should shop around and try to get the best interest rate on your credit card in order to pay more capital on your balance.

Withdraw money from your credit card at the ATM machine

You have the possibility to withdraw money from a ATM machine with your credit card. However, if you don’t access to your bank account and borrow the money directly from your credit card, you will get charge interest immediately. The interest rate is usually very similar to the one on your owing balance.

Pay the minimum payment

We already see the major impact that paying the minimum required payment would do on your credit card in our previous post (minimum payment, maximum amortization). Basically, the less you pay, the more you pay in interest and the longer you will pay.

Give your credit card to someone you “know”

This is a good thing that cashiers are matching more often your credit card signature with you current bill signature. However, people “you know” can still use your credit card on the internet without many problems. Therefore, you must understand that you literally allow them to use it to its limit without any control on the actual purchase.

These are good example of things to not do with your credit cards and we will have another post with 3 other major mistakes to avoid with credit cards.

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