We can all agree that credit cards are one of the most convenient ways of making purchases, while their ‘ability’ of rewarding us for buying things can be just enough of a reason to keep using them. But on the other hand, let’s not forget that not using them properly can lead to some ridiculous debt, really hard to get rid of.
If one of your items on your bucket list for 2021 is better management of your finances, here are a few credit card mistakes you should completely avoid next year!
Making just minimum payments
We know, when you’re short on cash and already carrying a credit card balance, it can be tempting to make just the minimum payments each month, thus buying yourself some more time. However, the longer you’re carrying a balance, the more interest it will attract.
This is one of the most common credit card mistakes which, besides costing you more money, it can also hurt your credit score. Therefore, if you can’t pay off your balance in full, try making more than just minimum payments until you’re…out of the hole.
Applying for more cards at once
Most likely, you will receive a lot of interesting offers for new credit cards in 2021, with rewards that will tempt you. However, our recommendation would be to limit yourself to just a few of them. The less, the better!
The idea is simple: the more credit cards you apply for, the more hard inquiries you will have on your credit record. And we all know what kind of impact this could have on your credit score, not to mention that with access to multiple cards, the easier it will be to overspend. Stick just to what you need and avoid all those offers that sound too good to be true.
Not looking over your account statements
Finally, let’s talk about an issue a lot of people tend to ignore, and oh boy, they are doing such a big mistake!
Checking your monthly statements, to see what they’ve racked up, should be one of your priorities, otherwise, you might end up being a victim of fraud and not even noticing it. There were many situations in which people got their credit card info stolen and had charges ran up on them, thus acquiring a lot of debt!
Take a look over your account statements as often as possible. By doing this, you will have a clear picture of what you’re spending on and what kind of financial habits – poor or good – you’ve developed!