Credit Card Help: Top 3 Credit Card Mistakes to Avoid

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The following is a guest post from Ade with Credit Cards.org

Credit Card Help: Top 3 Credit Card Mistakes to Avoid



Credit cards are the norm nowadays. Because of the convenience, more and more people carry around plastic instead of cash. However, not all people know the full responsibilities of having a credit card.

Mishandling and lack of knowledge could easily lead to debt. There are small details and loopholes all credit card holders should consider. In this article, we’ll tackle some of the most basic mistakes first-time credit card holders make.

Mistake 1: Not reading the contract and fine print.

Before even considering getting a credit card from a certain company, you should ensure that you know all of your options, so you can pick the best one from the bunch. This will depend entirely on how much you can afford, and how frequently you can make payments.

Picking a credit card with a wrong interest rate could prove to be disastrous for your finances. This is what makes reading the contract, along with the fine print very important. Further, you might want to look out for other details such as grace periods and grounds for hiking up the interest rates. This way, if you don’t like certain terms, you can either renegotiate the contract or go to another service provider. It’s best to take care and read the small details before you make a decision, so you won’t have any regrets later.


Mistake 2: Being late for the credit card payment.

Making the deadline for payment is probably one of the most useful disciplines you should master. A payment past due could mean hefty fines. It also lowers your credit score, and appears on the history. Small details like this could damage your credit score and record permanently. Also, some credit card companies can hike up your interest rates based on a late payment. You won’t just have to pay a fine; you’ll have to pay a much heavier price for the rest of the loan. And the worst part is, it also affects your capability to get a loan. Pay on time and you won’t have a problem with these issues.

Mistake 3: Falling for credit card deals with rebates, rewards, and high interest rates.

Some people have the notion that if they have rebates and rewards, they can offset their losses when they’re paying the interest for their credit cards. This works sometimes, when your interest rates aren’t that high.

However, most of the time, these too-good-to-be-true offers really don’t give you as much of a discount, because essentially you’re paying for your rewards with the interest rate the credit card company’s getting. Sometimes, you’ll even have a higher interest rate than what you could normally get for a regular offer. Just because something is free doesn’t mean it’s cheap. These deals are only profitable when you travel frequently and you can exchange your rewards for some mileage. Otherwise, you’ll really have to look at the small details. If the interest rate is too high for your budget, don’t think you’ll be able to get the money back because of the free rewards.

How about you all? What mistakes have you made with credit cards? 


Share your experiences by commenting below!

Jacob’s Thoughts – Listed below are my random thoughts as I was reading this article.

  • @Being late on credit card payment – You can now reduce the frequency that this occurs to you by setting up an automatic payment plan with your credit card company’s online user interface. It is easy, free, and will save you a lot of money!
  • @Falling for credit card deals with rewards, etc – There is a definitely a trade off that exists between getting lower APRs (interest rates), cash back/point rewards, and sign up bonuses. Perhaps nothing exemplifies this better than the Discover Build Your Own Card feature. By increasing the amount of the bonus offer you get for signing up for a card, you actually increase the APR that you will receive! Interesting stuff!

***Photo courtesy of http://www.hotelmarketingstrategies.com/wp-content/uploads/2009/10/mistake.gif