Credit cards is a must tool for many of us. It offers security and convenience that cash not. But it could become our worst nightmare if don’t use credit cards responsibly. Credit.com has make 3 list of credit card mistakes make by their owner.
Going Into Debt to Get Rewards
– Credit card companies always making sign-up bonus offers and cash-back rewards to attract the potential consumers. It is good to take advantage of the offers but sometimes it could put yourself in debt in order to fulfill the promotions. Don’t get into their trap only to get the rewards. It usually caps on how much cash you can earn, but if you charge too much and can’t pay off the balance in full, you’ll be paying interest on those charges. The interest charge could wipe out all of the rewards we could earned.
We can try to earn rewards, just make sure it couldn’t effect your credit cash flow.
– It is always happen as the owner of credit card don’t spend wisely. While they only pay minimum monthly payments, the debt and interest increase untill it become a huge debt. This is the mistake that always happen and could make the owner of the plastic card bankruptcy.
Closing a Credit Card
– Maybe you think closing credit card is a best way to out from debt but it is not really true. It could have a major negative impact on our credit scores. One of the major components of your credit score is the age of all your accounts. The higher the average age, the better it is for your credit score. Canceling an old card could ‘age off’ of our credit report faster, meaning you not only lose the age of that account but also that positive payment history.
Source :- Yahoo Finance
// I don’t have any credit card anymore. Just a debit card to purchase using card or online transaction. I’m afraid as I’m not really good in spending.