Five Credit Card Mistakes to Steer Clear From

repair bad credit

Credit card debt and bad credit history are directly connected that one needs to watch out for the other. Using your credit card smartly can save you from the risk of bad debt. This article presents five credit card mistakes that must be avoided:

Sticking with the minimum due payment. Credit card holders have the option to submit only their minimum due payment and carry the rest of their balance for the next month. But the longer you put off completing your payments, the more you will be at risk of falling in the debt trap.

Imagine how much you can save from your budget by not paying the additional 10% to 20% interest. You don’t have to maintain a balance in your credit card account to keep a high credit score. On the contrary, submitting your payments on time and paying off your balances in full are the key to achieving good credit.

Charging petty expenses on your credit card. Never make the mistake of using your credit card for purchases that you can easily pay in cash. It is more tempting to buy more or buy unnecessary things when shopping with a credit card.

Taking out cash advances. Never use your credit card to borrow cash. If it’s an emergency, consider other options such as borrowing from a friend or a relative, or selling some of your old stuff. Cash advances are instantly charged with high interest rates and transaction costs so you’ll end up paying for more than the amount you borrowed.

Using credit cards to pay off medical bills. Have you obtained a medical insurance for you and your family to see you through sickness and emergencies? Some people who don’t have insurance find themselves using their credit cards to pay for medical bills. But such a situation can instantly put you in serious debt problem and may even led you to bankruptcy.

Ignoring the problem. The warning signs of bad debt may not be that obvious at first. However, if you find yourself having a hard time catching up with your credit card payments, it’s best to stop using your credit card for new purchases and focus an your repayment instead. Do not ignore the signs of bad credit.

Do you follow a monthly budget plan? Are you aware of how you’re really spending your money? Some people may think that they’re not guilty of overspending until they start taking a closer look at their monthly expenses and find it to be true.

Allison May is a credit consultant and a writer for Credit Creators. The resource provides consumers with valuable advice and information on credit cards for bad credit,credit cards for good credit and other credit-related issues. Its main objective is to help people build good credit. Copyright © 2008

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