From serving instant monetary assistance to no cost interest while repaying through monthly instalments are the main reasons for the increasing popularity of credit cards.
Moreover, the benefits of reward points and turning long boring waiting hours of the airport into an interesting one by providing a lounge facility add another feather to its crown. Still, there are ample rumours about credit cards.
Besides, it has often heard from the credit card holder himself that it is not good to hold a business credit card. It may increase bad credit and for entrepreneurs it becomes difficult to arrange more money by applying for business start-up loans with guaranteed approval from UK lenders. This is due to the failure of using a credit card properly.
Lack of knowledge gives birth to these mistakes. Here we will discuss such common mistakes that often a credit cardholder performs.
4 common credit card mistakes
Carry forwarding credit balance –
The main reason behind such a huge number of performing mistakes is a lack of knowledge. What people hear, they used to follow the same. Instead of searching the base of the statement, people just start following.
You may be concerned about your credit score. Well, this is something you should have always maintained for a long. However, there is no true base of saving credit balance for the future. It will never enhance credit scores. Rather, it will diminish the score and make you incapable of borrowing further.
By repaying minimum amount –
Although there is an option of paying the minimum amount, if you cannot repay the stipulated sum of money, it is okay till a certain time. For one or two months, it is considered okay. But exceeding the times will affect the credit score and leave a bad impact on credit history.
Lenders will consider you incapable while scrutinising the loan application. Besides, by paying minimum money, you will ultimately increase the owing amount.
By missing your due date –
Even if you pay the entire outstanding amount after the due date, it serves little value. Moreover, it clearly indicates the miss out of payment which hints at the cardholder’s incapability of repaying debt. There is a common saying that even if you miss out on repayment, it will not affect you.
But it is not true. Losing track of payment due date will ultimately decrease credit points. Besides, if the payment becomes delayed more than one month, the credit card company may levy an extra charge.
Negligence of seeing statement –
You may have heard that complaining credit card users about unusual deductions. Now, this is some intolerable. But it is also undeniable that a credit card company does not associate with fraudulent activity. Rather, it tries to reduce users from fraudsters.
Overlooking the billing statement for a long time may make you feel that you are paying higher than expected. A billing statement contains the summary of every single deduction and charge levied upon your card account.
4 ways to avoid credit card mistakes
There are many other ways by following which one can easily avoid those mistakes. These are,
Using credit balance –
There is nothing to worry about using credit balance. Rather it has been provided based on your income range. Believe me, and you are capable of paying the bills. On the other by using a credit card, you may also enhance your credit score.
Don’t pay minimum amount –
Why pay minimum while you can pay maximum? Don’t limit your repayment ability by spending minimum money on credit card bills. Besides, when you pay the minimum amount, the interest rate becomes compound, and you have to pay a bulk of money in the form of interest.
Why pay such a huge amount while you have not borrowed the same? So, start paying the maximum amount and enjoy the benefits of interest-free borrowing.
Use calendars to track due dates –
You may be a person of forgetful memory. However, there is nothing to worry about it. You can take help from your smartphone. Gadgets that will never ever allow us to perform mistakes until we make the best use of them surround us.
First, check the due date on the credit card application. Then go to the calendar of your phone and mark it as an important event. Set it as a priority and keep it on the home page of your phone. Don’t forget to set the alarm on the due date. It will help from missing out on the repayment.
Take a sharp look at the bill –
To avoid any discrepancy, take a sharp look at the bill every time you pay the bill. It will take merely 5 minutes. Rather, it will authenticate your payment history and borrowing amount all through the previous month. Therefore, no chance of paying more or less than the borrowed amount. If you follow all these techniques, then there will be no possibility of performing mistakes.