9 Critical Credit Card Mistakes You Didn't Know You Were Making
Posted: Wed Dec 14, 2016 5:57 pm
Credit cards are lovely. They give us the freedom to experience things without stressing too much about the money aspect of it. Credit cards really help us out, whether it's buying the awesome television we always dreamed of or taking that vacation we longed for.
But the convenience it offers also aids in clouding our judgement. Acting as a safety net for our desires in life, credit cards are also big time trouble makers. It is like a honey-trap that often lands us in situations we try our best to avoid.
Here are some really helpful credit card hacks that'll help you walk the fine line without unknowingly tipping over to the dark side of greedy banks.
1. Late bill payments
It is, of course, better than not paying your bill at all, but not a lot. Two things happen when you pay your bills late. You are levied a penalty worth a substantial amount, most often costing more than your minimum payment amount. Secondly, not paying up on time affects your credit score, which might not be a problem now, but will be a big problem when you apply for loans of a large sum, like a house loan or car loan.
2. Making minimum payments
Banks do give you the option of paying a nominal sum as a 'minimum payment' on your purchase every month but it's not something you should fall for. The interest that banks charge on your outstanding amount is quite high, and if you keep paying just the minimum amount, you would end up shelling out a lot more as interest. Many times even more than the actual value of the product. So best practice would be to save by cutting costs on other things and pay as much of the bill as you can. Remember, more the amount, more the interest.
But the convenience it offers also aids in clouding our judgement. Acting as a safety net for our desires in life, credit cards are also big time trouble makers. It is like a honey-trap that often lands us in situations we try our best to avoid.
Here are some really helpful credit card hacks that'll help you walk the fine line without unknowingly tipping over to the dark side of greedy banks.
1. Late bill payments
It is, of course, better than not paying your bill at all, but not a lot. Two things happen when you pay your bills late. You are levied a penalty worth a substantial amount, most often costing more than your minimum payment amount. Secondly, not paying up on time affects your credit score, which might not be a problem now, but will be a big problem when you apply for loans of a large sum, like a house loan or car loan.
2. Making minimum payments
Banks do give you the option of paying a nominal sum as a 'minimum payment' on your purchase every month but it's not something you should fall for. The interest that banks charge on your outstanding amount is quite high, and if you keep paying just the minimum amount, you would end up shelling out a lot more as interest. Many times even more than the actual value of the product. So best practice would be to save by cutting costs on other things and pay as much of the bill as you can. Remember, more the amount, more the interest.