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How you can avoid making credit card mistakes

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By: tiarajoseph11
on 25th Aug,2016

Here are some of the ways to avoid committing some common mistakes while using credit cards.
How you can avoid making credit card mistakes

Life without credit cards is next to impossible in the present world. However, you should avoid making mistakes unless it'll be harmful for your financial situation.

Here are some of the ways to avoid committing some common mistakes while using credit cards.

Take advantage of credit card rewards programs

Some of the credit cards come with rewards programs which comes in the form of airline miles or cash back facility, which you can redeem for gift items or gift cards. The more you spend, the more benefit you'll be able to get. However, be disciplined and accumulate points so that you can redeem it when required.

Do not make minimum payments on your cards

Avoid making minimum payments on your credit cards, as much as possible. It may seem to be the easiest solution when your financial situation is a little bit tight, but be careful of not making it a habit. The more balance you carry, the more interest payments you'd have to make.

Try to not take cash advances unless it is an emergency

Taking out a cash advance usually results in paying a high interest rate and a transaction fee. So, unless it's an emergency and there's no other way out for you, do not take out cash advance on your card. Similarly, do not exceed your credit limit as doing so, you'd have to pay a fee.

Remember that introductory rates have an expiry date

While going for balance transfer method and taking out a low interest offer, remember that there's always an expiry date. So, while taking out such a card, make sure you repay the entire balance within the low introductory rate period as otherwise, you'd have to pay very high interest rate on the outstanding balance.

Avoid making late payments on your credit card

Do not ever make late payments on your credit cards. Doing so, you'd have to pay late fees. So, if you pay by check, pay in advance so that you never miss out the last date of payment.

Perhaps the most dangerous mistake often committed by people is rolling over the credit card balance from one cycle to another.

Though it may not be possible for you to repay the entire balance at each billing cycle, yet don't make it a habit to carry forward your balance. Moreover, even if you cannot repay the entire balance at one billing cycle, try to pay off as much as you can, since the interest will be calculated on the outstanding balance you have. Doing so, you can avoid falling into debt problems and enjoy a stress-free financial life.

Read more on this topic: 9 Major credit card mistakes that can lower your score

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