Things you should know about your credit card

Things you should know about your credit card

Getting your first credit card is an important part of your financial journey. Consider it a rite of passage, or perhaps even a fashion. Today, people who quickly use their credit cards in retail outlets and restaurants are reaping the many benefits of using plastic cash. They enjoy endless exciting rewards like discounts on dining out or shopping vouchers.

 

No matter how exciting this is, be careful and do not fall prey to potential financial mistakes. New credit card users often overlook glaring issues such as overusing credit or unnecessarily choosing card payments over cash. Your neglect can tarnish your credit score, which can drag you into a vicious debt cycle.

 

Credit Card Missteps Everyone Should Avoid

 

 

Borrow your credit card

Allowing someone else access to your credit card exposes you to unforeseen risks. Be aware of the dangers of not checking their purchases. Also, not paying them makes you responsible for paying the bills yourself.

 

 

Transfer your balance

Credit card companies often entice credit-hungry users by offering attractive cash rewards. Getting caught up in these tactics can leave you in debt, and you can cancel any promotions by using your balance transfer card to buy goods or services.

 

Use credit cards to withdraw cash

Withdrawing cash through credit cards comes with a high fee rate. These cash advances may carry 2.5% interest on the amount withdrawn. Interest will be charged starting from the first day of withdrawal, usually without a grace period.

 

Only low payment

Paying down the minimum debt only extends the debt repayment period. Extending the loan term increases the interest payment period. Pay off all debts as soon as possible, unless your financial situation advises otherwise.

 

Delay in reporting lost/stolen credit cards

By delaying reports of stolen credit cards, your inactivity benefits the thief. In turn, you give them a long head start on misusing your card. Report such crime immediately to the credit card company and local police to avoid liabilities for trappy transactions.

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