Break These 8 Bad Credit Card Habits
Building wealth means creating good habits that help you save and busting bad habits that only lead to debt. While it is not easy to develop or drop habits, everyday practice makes a big difference. Check yourself. If you are guilty of the following bad habits, replace them with better, money growing habits today.
1. Ignoring your credit card statements. Yes, this activity is boring and time-consuming, but reading your credit card statements is the only way to catch unauthorized credit card charges or billing errors. Review your entire statement, report errors, and save more money inside your pocket. 2. Shopping without checking your available credit. Sometimes you forget certain purchases or your credit limit was lowered since your last checking. It only takes a quick phone call or taps on your phone to quickly confirm that you have enough available credit for your purchase.
3. Using your credit card instead of debit card. Everyday purchases should be paid with your debit card. If you use your credit card, it should be a conscious decision with a concrete plan for paying off what you are charging. 4. Only paying the minimum. Unless you keep a very low balance or have a 0% interest promotion, you always pay more in interest if you are only paying the minimum. Pay your credit card bill in full every month, or at the very least, send more than the minimum to save money on interest.
5. Late payments. You can always schedule your credit card payments in advance. There is no excuse for habitually late payments. It is so much better to save the money you will otherwise spend on late fees and higher interest rates, too. 6. Transferring balances to avoid payments. Balance transfers have a place in a good debt management strategy. However, if you are only doing it to avoid paying your credit card bills, you are setting yourself up for failure. You will never progress in paying your debt and the balance transfer fees will only compound it.
7. Taking out a cash advance. This is one habit you do not want to start. Your credit card should never be a source of cash. Also, cash advances are one of the most expensive types of credit card transactions. Interest rates are high and you are charged interest right away. You also pay a cash advance fee every time! 8. Opening new and unnecessary credit cards. New credit card applications can hurt your credit score and open up trap doors that lead to debt. Do not be tempted by the low-interest rate promotions and sign-up bonuses! If you do not need it, stay out of it! This is a bad habit that will not help you in the long run.