Avoiding Common Credit Card Pitfalls

by Susanna Hamilton, Contributing Editor on March 4, 2012

Credit Card Pitfalls
Credit Cards are a huge part of today’s financial world. Instead of paying for purchases with cash, many people opt to use the fantastic plastic which is today’s credit card. Consumers consider this to be a much more convenient way of shopping.. giving them the ability to manage their budgets, control their spending and pay one bill each month when the statement arrives.

For others, the use of a credit card becomes a crutch.. a trap which, if not closely monitored, can lead to uncontrolled spending, high interest rates and much unwanted and unaffordable credit card debt.

For those who fit into the last category, here are some simple tips on how you can avoid several of the pitfalls associated with credit card misuse.

Know Your Billing Cycle:

Thanks to newly enacted laws protecting credit card consumers, your bill will now always be due on the same date each month. Several credit card companies offer their customers auto-reminders to let you know when your bill is due. By knowing the exact date your payment is due, you will be able to log this information in any calendars you might have. This will also give you enough time to make sure you actually pay the bill before the due date to reduce the chance of generating late fees.

If by chance something comes up and you realize you have forgotten to make your payment, make sure to contact your credit card company immediately. Proper communication can lead to reversal of late-fees.

Set Up Auto Pay:

A great feature for credit card customers is the use of Automatic Bank Withdrawal in order to pay a determined amount each month. These funds are automatically withdrawn from your bank via secure servers, ensuring to protect your privacy and prevent identity theft.

Making sure you pay at least the minimum due will also allow you to stay away from those pesky late fees.  When you are consistent about paying your bill each month on time, this will positively affect your credit rating.

Pay Your Balance in Full:

It seems simple enough, but the best thing you can do to avoid credit card misuse is to pay the entire balance off each month when it is due. When you roll a balance over to the next month, you typically can be charged as much as 20% interest.

Why pay $12.00 or more for an item which originally cost only $10.00? This is where most consumers get into trouble in the first place. We purchase beyond our financial means. In case of an emergency purchase, make sure you have a plan in place to pay off that large purchase as soon as possible.

Credit cards can be an extremely effective and easy way to shop for any purchase, regardless of the size. With more retailers accepting credit cards every day, the temptation to overuse credit cards is becoming stronger. Many people get into trouble financially because they cannot seem to control their spending and they continue to use their credit cards beyond their means.

If you follow the above recommendations, you will find it easier to avoid credit card pitfalls that tend to make credit cards more harmful than helpful.

 

Article Courtesy of Credit Card Approval Center

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