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Credit card sins: What they are and how to avoid committing them

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By: anonymous
on 26th Feb,2014

It is true that life without credit cards seems to be impossible. However, we can surely avoid committing some deadly sins while using plastic money.
Credit card sins: What they are and how to avoid committing them


It is true that life without credit cards seems to be impossible. However, we can surely avoid committing some deadly sins while using plastic money. Here are some of the dangerous mistakes we often commit and what we should do in order to avoid them.

  • Taking out credit cards from nearly every stores - It will be a great mistake on your part if you say ‘yes' to each and every credit card offer you get from every stores. What happens is, every time you apply for a credit card, a credit inquiry is made, which in turn, may reduce your credit score by some points. This is because the creditors assume that you'll fall deep into debt by opening too many credit lines. Likewise, do not close multiple credit cards at once. It will reduce your credit utilization ratio as your available credit limit will get reduced, thus lowering your score.
  • Buying each and everything with plastic money - If you have the tendency to get enticed to buy every other thing and that too, with plastic money, then the day isn't far you'll fall into financial problems. It's a psychology that you tend to spend more when you pay with credit cards. So, try to avoid paying with a credit card, as far as possible.
  • Using your credit card limit to the fullest - Do not spend till the last amount of your available credit limit. If you do so, then your debt-income ratio will be increased. The closer you reach to your credit limit, the less you'll be creditworthy to your potential creditors.
  • Feeling shy to let creditors know your actual financial situation - If you are facing problems in managing your credit cards at the present interest rate, do not feel shy to discuss your financial situation with your creditors and request them to reduce the rate of interest. You may also ask for payment extension if there's some financial emergency and you're struggling to manage with your income.
  • Not checking credit reports at regular intervals - Do you feel that checking credit reports is not necessary since you pay back your loan balances timely every month? If yes, then you're making a serious mistake. This is because you never know whether or not there are any mistakes in your credit reports, which may lower down your score. So, make it a point to check your credit reports at regular intervals and dispute incorrect negative items, if any.

Along with this, you should make a promise to not roll over balances from one credit cycle to the other. Yes, sometimes, you need to do this when you buy a big price item with a credit card. However, it should be kept in mind to not make it a habit. If you do so, you fall into the prey and will often land yourself into debt problems. So, do not go on spending since you don't have to pay now. Always remember, what you're spending, you'll have to pay back the amount - either in this cycle or pay interest along with paying back the original amount. It is your life; so, the decision is yours - whether to fall into debt to manage credit cards responsibly and lead a stress free life. 

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