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Today´s guest post comes to us from Alban. Alban is a personal finance writer at Home Loan Finder, a home loan comparison website.
- You don’t repay your balance in full each month. If you can benefit from interest free days all the better, but even if you don’t it is important to repay your balance as soon as possible, and in full each month. When you have a revolving credit card balance you are charged interest again and again each month on the same balance and those purchases you made months ago have now doubled or tripled in cost and that item may have even outlived its usefulness before it even repaid.
- You’re unaware of your balance. Ignoring your credit card balance won’t make it go away, in fact the opposite is true. When you are aware of your balance you will know that you can’t afford to keep spending on your card, or making frivolous purchases, and should instead channel those extra funds to your repayments.
- Making large purchases. If you are in the market for a new fridge or television for example the store you are buying from may offer you a store card or credit terms. However, your own credit card interest rate will often be much lower than the store is offering you however, putting such a large purchase on your card means you need to pay it off quickly to see the savings in interest.
- Making cash advances. If you have interest free days on your credit card, cash advances often don’t qualify and will instead attract interest right away. Cash advances also often attract a higher interest rate than regular purchases so those withdrawals cost you even more.
How about you all? What in your life has caused you to accrue some credit card debt?
Share your experiences by commenting below!
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