Credit cards are one of the most enjoyed banking facilities by customers. No wonder there are so many promotions and merchants working with banks to promote purchases using credit cards to increase their sales.
However, many of the credit card users use this one card irresponsibly. When in fact, by using a credit card, you are in debt with the bank. To avoid your finances being a mess due to a credit card, know what mistakes you might be making.
8 Mistakes Regarding Credit Cards
Here are 8 mistakes that are often made by credit card users that can get them stuck in credit debt.
Not Strategic in Use
Credit cards are made to anticipate crimes that can arise from the use of debit cards for shopping such as direct access to your account or spending without an intermediary. However. One of the advantages is that by using a debit card, you will be more protected from excessive shopping.
Many use credit cards without thinking about these benefits. Even though you should use a credit card strategically, for example, for large-risk transactions such as online buying and selling transactions or to avoid financial problems between sellers and buyers.
Your credit status will be bad if you pay late. In addition, you also have to pay interest due to late payments. Therefore, if you want to use a credit card, make sure that you can pay it in a timely manner. Mark your calendar or make a reminder 7 days before the date your bill is due.
Using a Credit Card Maximally
Maximizing the use of your credit card to a limit can damage your credit, especially if you can’t pay it back. This can also avoid excessive shopping habits. Ideally, you can use approximately 30% of your credit card limit.
Credit card debt is one type of debt that can be very detrimental to you. Credit card debt can accumulate and gradually the amount will increase. Of course you don’t want your entire finances to run out just to pay off debts from your unnecessary shopping, right? Therefore, as much as possible avoid credit card debt.
Pay with a Minimum Amount
When you want to pay a credit card bill, you must have seen a minimum payment option. Never be tempted to pay this amount. The first reason is that this can damage your credit status. The bank will judge that your finances are in trouble and you are likely to stop paying bills.
Second, the minimum payment is given with the loan interest on the amount that has not been paid. The interest on this loan can be very large, especially if accumulated, until the interest exceeds the amount you have not paid.
Not Checking Credit Card Bills
You must always remember to check your credit card bill because it is possible that the seller made a mistake in inputting the number or the bank put on a transaction that you did not do. Check whether the amount matches the receipt you saved, then whether you did the transaction.
By always checking bills, if the bank makes a mistake on your bill, you can report it immediately so that it can be processed quickly.
Like a debit card, your credit card can also be used for cash withdrawals through an ATM (Automatic Teller Machine). The difference is that the cash you withdraw using a credit card will be charged an interest of 20% (depending on the policies and regulations of the bank).
If you do not want to pay the loan interest, you should avoid using a credit card to withdraw cash. Arrange your shopping method so that you won’t run out of cash.
Don’t Care About Rewards
Rewards are a bonus given from the bank to credit card users. This bonus is usually “free money” that you can use like a balance on your credit card. You get “free money” from using a credit card.
You should use these rewards , especially if there is a promotion from the merchant . Be careful when using these rewards, don’t be tempted to shop more just because you want to get more rewards .
Use Credit Cards Carefully
Credit cards are created to facilitate your shopping transactions, you don’t have to trouble carrying large amounts of cash, you can also easily save a card compared to the cash.
You should, as a responsible economic actor, you must avoid the mistakes mentioned above so that your finances will not fall apart later. By becoming a good finance minister, your family’s financial goals will be more easily achieved.
Do you have a credit card? How often do you use these credit cards? Have you ever experienced credit card debt? How do you deal with it and overcome it? Share your information with other readers so that they and you don’t make credit card mistakes many times.