Top 7 Most Common Credit Card Mistakes

Credit cards can be tricky, and it’s common for people to make mistakes when using them. The key is to learn from these mistakes and to avoid making them again.

Credit cards are by far the most accessible and effective credit building tool available to consumers, since you don’t have to incur any debt or make any purchases in order to add positive information to your major credit reports. As a result, if you’re unsure about your ability to spend responsibly, just lock your card in a safe or even cut it up.

We list the Top 7 Most Common Credit Card Mistakes – and show you how to avoid them.

Getting too many credit cards
This increases your debt exposure. And the more credit cards you have, the better chance you have of getting deeper in debt. Stop and think: do you really need another credit card?

Not reading the fine print
Reading the fine print is so important. Some credit cards seem attractive with a low introductory rate. But if you read the fine print, they charge a percentage to transfer the balance and after a certain period the interest rate goes up dramatically. Before you apply and sign up for any credit account, make sure you understand the key terms spelled out in your contract.

Getting the wrong type of credit card.
It's important to figure out what card is best for you and your lifestyle. Rebates are important and it's important to make sure you're getting the best deal possible. While many people get distracted by rewards, rewards cards aren’t right for everybody. If you have credit card debt, get a balance transfer credit card. Remember, credit cards are not a form of supplemental income.

Don''t use your credit card for everyday items 
Except in extenuating circumstances, you should have your budget under control enough that you can at least pay for your monthly necessities with your monthly income.

Credit Card is not a savings account 
Never use your credit card like you would a current account – that means don’t put your salary into your credit card every month and think that it will be cheaper to just swipe all the time. There are plenty of bank accounts available that offer good fees and packages which covers electronic transactions, withdrawals and even online banking. Shop around and compare accounts by using the comparison calculator to find the option that is best suited to you.

Don't ignore your debt
Missing payments is one of the most problematic and easily correctable issues facing credit card users. It will cost you in terms of late fees, interest payments (given the loss of your grace period), and eventually credit score damage. All you need to do is set up automatic monthly payments from a bank account for at least the minimum amount due. This will take forgetfulness out of the equation.

Being liable for charges you haven’t made
Don’t put off reporting your card as lost or stolen in the hope you’ll find it again. The danger is that you’re still liable for all charges on the card. If it has been stolen, someone could be profiting at your expense. We can place a temporary stop on your card so if you find it again you won’t need to apply for a replacement card.

Although credit cards can be a great option by providing money when you need it, you need to understand how the card works to avoid having trouble making repayments.