There can be nothing more horrible than mounting credit card debt. Most of the credit cards come with excessively high interest rate charged on them. Quite obviously, with each passing day, your outstanding credit card bills will keep on growing due to the high interest rate. In such a circumstance, your credit card bills won’t take too much to strangle your financial peace.
6 Mistakes that can make it difficult for you to survive:
Now, you must be wondering how credit card debts can be so demanding? Not credit card debts, but consumers’ thoughtless mistakes are to blame here. Careless and mistaken approach can really aggravate the credit card debt problems. Following are some of the mistakes that consumers generally do while managing credit cards and invite debt troubles consequently:
- Neglecting bills initially: This is the mistake that most people do quite often. People have this dreadful habit of missing the due date for bill payment. Once they start defaulting, it becomes difficult to catch up and due bills start taking shape of credit card debts. When there is no steady source of income or savings to pay off the debt, it becomes even more difficult. So, if you really want to stay out of credit card debt, then never neglect to pay your bills on time.
- Being indifferent to the fine prints: Every credit card comes with different terms and conditions. Before you swipe your credit card, it’s essential to know about the terms and conditions. You must read the fine prints and get all the details to use your credit cards in a better and safe way. Specially, if you’ve balance transfer in mind, then you must know the rules for that accurately. Or else, after transferring the balance, you may end up owing more. This will ultimately add up to your credit card debt.
- Paying less every month: Many people pay every month to eliminate credit card debts, but they pay the minimum. Credit card debt never stays static as there is interest to pay also. Minimum payment actually does nothing to reduce your credit card debts. Just because of this, it’s extremely essential to increase your monthly payments. Use a credit card calculator and decide exactly how much you can afford to pay per month. Pay off as much as you can per month to eliminate your credit card debts successfully.
- Using numerous cards but tracking none: Every now and then, credit card companies come up with exciting introductory offers to entice consumers. Many people fall for the marketing strategy and end up applying for numerous credit cards. It’s advisable not to have too many credit cards as this will make it difficult to maintain all. It’ll be difficult to track the exact amount of debt in each account. Using numerous credit cards and tracking not a single one can be really catastrophic. The chances of missing payments will increase and as a consequence your debts will grow. So, you can realize how catastrophic this mistake can be
- Chasing reward points unnecessarily: Many credit cards offer reward points for the shoppers. You can get cash back or win some airline tickets due to the reward points. It seems lucrative for many consumers and that’s why they feel it’s fine to shop like a freak and earn reward points. But this habit actually leads them to insurmountable credit card debts. The reward point you get on a credit card is supposed to be worth 1% of the amount you spend in total to be eligible for the reward. So, you can imagine how much you can save by controlling your urge for reward points.
- Taking credit card billing statement for granted: Well, this is perhaps the most common and careless mistake that you can easily avoid. Every month, whenever you receive your credit card billing statement, check it thoroughly. Does any charge seem unfamiliar? Ask the credit card company about it. In this way you’ll be able to amend the mistakes on time. If you won’t check the statements on time, then disputing the erroneous charges will be not be possible either. If you’ve the habit of forgetting the last date for payment, then the statement will remind you of the payment also. Glance through your billing statement carefully to keep credit card debts well under control.
The 6 mistakes pointed above are really common and more than 80% consumers fall prey to them. At initial level you won’t even realize what harm they can do to your financial life. Not only your finances, but your credit history will also suffer severely due to these thoughtless mistakes. So, if you really want to avoid sinking into credit card debts, then make it a point to avoid these 6 mistakes at any cost. Also use your cards sensibly to keep debts well under control.
Author bio: Samon Bagons is an experienced financial writer who indulges in helping people with sound financial advice. He is also active in social media and has a strong profile through which he communicates and assists people. You can visit http://www.facebook.com/OVLGroup to know more about his views.