There are many mistakes that can be made with a credit card and all of them will end up costing you a great deal of cash and ruining your credit. Once these mistakes have been made, it can take a very long time to repair the damage and return your finances to their previous heights. The best course of action is to avoid these mistakes altogether by staying vigilant and using your credit cards wisely. Here are some mistakes to look for and ways to repair the damage done.
Maxing Out Your Credit Cards
Using a high percentage of your available credit can cause a number of different problems. Using most of your credit makes it more likely that you will go over the limit for that card, triggering expensive fees and an increase in the interest rate you are required to pay on new purchases. The amount of your available credit that you are using can also have a big impact on your credit scores, as credit utilization is part of the calculation for your score. You should spend no more than 30% of your revolving credit card limits to keep your credit scores high.
Neglecting To Review Your Statements
Neglecting to review monthly credit card statements is one of the most common mistakes made when it comes to using credit cards. Your statement will include all of the purchases made during the statement period, the total amount owed, the interest rate charged, and how long it will take you to pay off the balance paying only the minimum amount. As soon as you receive your monthly credit card statement, you should take a few minutes to look it over to ensure that there are no mistakes included and that you know what you have been doing with your credit.
Triggering Expensive Fees
There are many different ways to trigger fees on a credit card account and these fees can be very expensive. These fees are charged directly to the account, adding to the balance of the card, and are subject to interest charges if the entire balance of the account is not paid off by the due date. Some common fees to watch out for include over limit fees, cash advance fees, balance transfer fees, late payment fees, and foreign transaction fees. Before signing up for a credit card, you should review the terms and conditions for the card to see what fees may be charged and the amount of those fees per occurrence.