Are you exposing yourself by making serious credit card mistakes? If you are concerned about your current credit score, you’re probably more exposed than you think. And even though having access to credit can be extremely rewarding however there are a ton of pitfalls that you need to avoid to keep your FICO score high. Avoiding these pitfalls from the very start will allow you to enjoy the convenience and security many cards often offer.
Pay Your Debt Before Using Your Rewards
First things first, don’t make the mistake of using rewards you’ve earned on your card without paying off credit card balances in full every month. Many of the top notch credit cards offer consumers rewards in the form of points, airline miles and even cash back. In short these cards can put extra cash directly into your pocket every time you make a purchase. Many people make the mistake of thinking they can freely spend and rack up debt on a rewards card. After all, the more you spend the more points you earn.
But if you fail to pay off the balance in full every month, the rewards card can be extremely pricey. The reason being is that these types of cars carry very high interest rates which can negate any rewards you might have received. In this instance, low interest rate cards are much better than rewards cards – especially if you are unable to pay the balance in full each month. So make this a rule of thumb, pay off your credit card debt, then reward yourself with your reward points.
Steer Clear Of Balance Transfer Fees
The second credit card mistake you want to stay clear of is paying a fee to transfer a balance. When you transfer a balance with a high interest to a zero-percent interest card, card issuers typically charge you a balance transfer fee ranging between 3 percent and 5 percent. Instead of paying this fee, look for a credit card option that does not attach any fees to transfer balances. You could save a ton of money by doing a little research.
Avoid Pesky Credit Card Fees
A third mistake you might want to avoid is paying a monthly fee on a prepaid credit card. Because of rising high bank fees, many consumers are choosing prepaid cards over traditional credit cards. The thing to be aware of is hidden charges, activation and even inactivity fees that can wind up being more costly than the card is worth.
Whatever your financial goals in life, whatever lines of credit you open up, avoiding credit card mistakes will give you what you need to be successful. So whether you want to pay off balances, or looking to choose a no fee balance transfer option, do your best to keep your credit in good standing. If you avoid the credit pitfalls listed here then you are sure to succeed.