With the new year here, there’s no better time than now to take full control of your finances. And for many people, that means staying as far away from potential credit card mishaps as possible.
The last thing you want to do is make a mistake that will cost you time and/or money. Should this happen, your financial situation can take a hit, which results in more complications in the future.
On the plus side, when you’re aware of the many mishaps that are lurking, it’s much easier to avoid them. Here are four that should be on your radar at all times:
One of the primary benefits of a credit card is its convenience. You can make a purchase without cash or a debit card. However, this is also a risk, because you’re more prone to overspending.
It’s easy to get into the habit of making purchases that you can’t afford. Then, when your bill comes due at some point during the month, you realize that you don’t have enough money to pay it.
2. Maxing Out
It’s critical that you know your credit limit and current balance. This allows you to avoid a situation in which you max out your credit card.
Not only does this affect your credit score, but it also means that you can’t use your credit card until you make another payment. And if you’re only making the minimum payment, it’s safe to say that a good portion of your credit will be tied up for quite some time.
3. Missed Payments
No matter what it takes, do your part in ensuring that you never miss a payment. Even if you’re only making a minimum payment, it’s important that you do so on time.
A missed payment can impact you in many ways. For instance, you can get hit with a late payment fee. On top of this, if it’s reported to the credit bureaus, your score will take a hit.
Set at least one reminder, such as on your cell phone, to ensure that you never miss a payment in the future.
4. Missing Out on Available Benefits
When you choose a credit card, you typically do so with the idea of obtaining as many benefits as possible. But remember this: just because benefits are available doesn’t necessarily mean you’re taking advantage of them.
For example, if you have a cash back rewards credit card, look into the many ways you can maximize the amount of money you earn.
These are a few of the most common credit card mishaps that people run into. With advanced knowledge, you’re in better position to prevent trouble in the months to come.
Have you fallen prey to one or more of these mistakes in the past? Which steps will you take in the future to protect against them?