8 Bad Credit Card Habits To Avoid At All Costs

Many of our clients tell us that they have trouble managing their credit cards.

While some complain that they invariably rack up huge amounts of debt, there are others who say that credit cards are too expensive and require the consumer to cough up various kinds of fees.

 However, the truth is that credit cards are incredibly useful instruments that can serve the holder in a variety of ways.

The trouble really starts when the consumer develops bad habits such as the ones listed below:

1. Paying just the minimum amount due

This is usually just 2% of the entire amount due – many individuals prefer to just pay this amount and be done with it rather than figure out the actual amount they can afford to pay every month to reduce their debt load.

Unfortunately, by paying just the minimum amount due, you are effectively increasing your debt burden – this, in turn, means that in the long run, you’ll end up paying massive amounts in terms of finance charges.

 The wise thing to do is to break this habit and pay your bill in full every month, or at least pay as much as you can afford to pay that month.

2. Missing payments or making late payments

If you forget to pay your bill on time and remit the amount a couple of days later, you’ll be hit with a late fee.

If you miss the monthly payment altogether then you’ll not only have to cough up penalties, but the fact will also be reported on your credit report.

To avoid paying unnecessary charges and to protect your credit score, it is important that you set a reminder that encourages you to pay on time each month – or else you can simply opt for automatic payments.

3. Making use of cash advances 

Your credit card offers you the facility to withdraw cash from an ATM, but beware.

Unlike purchases that you make through your credit card, cash advances have no grace period and start accruing significantly higher interest charges right away.

Moreover, you have to pay a cash advance fee – this contributes towards making cash advances a very expensive affair.

Thus, you should never use cards as a source of cash - save some amount from your monthly income to meet your cash expenses instead.

4. Going overboard and accumulating unnecessary credit cards

Many consumers keep on applying for credit cards, attracted by low-interest rate charges or sign-up bonuses.

However, every time you apply for a card, your credit score takes a hit thanks to the hard inquiry that takes place.

Further, the greater the number of credit cards you have, the more likely you are to overspend and get into debt.

Thus, it’s better to not apply for unnecessary cards.

A corollary to this mistake is that to earn reward points, many consumers buy items that they do not need.

When you do so, you are simply racking up debt that you may find difficult to pay off.

5. Not using your credit card often enough

It is advisable to use credit cards once every three to six months, else the issuer might cancel the credit card.

Another drawback is that if you don’t use your card for a long time, certain credit card formulas may ignore the card for score calculation purposes.

6. Not checking credit limit before making a purchase

When you make a purchase, it is important to ensure that there is enough limit available for the purpose, else you risk attracting overdraft charges.

If you’ve installed the issuer’s app on your smartphone, you can obtain this information instantly.

7. Not going through credit card statements

Every month, you must go through all the transactions detailed in your statement – unless you do so, you will not be able to identify fraudulent or unauthorized charges and billing errors.

8. Not tracking reward points

One of the primary benefits of using a credit card is the amount of rewards points you are able to earn.

Once you’ve racked up reward points, it is important to keep track of them and redeem them before they expire.

Many consumers do not bother to do this, thereby missing out on one of the biggest advantages that credit cards have to offer.

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At Fund&Grow, we help clients with good credit, obtain as much as $250,000 of unsecured credit at 0% interest.

This amount is available for a period of 6, 12 or 18 months, and can be used for anything from financing a small business to providing a down payment on a property.

We will guide you every step of the way. So, what are you waiting for? If you need such funds, call us, at (800) 996-0270, and we will take care of the rest.