5 Things You Should Know About Your Credit Card

Advertising Disclosure

Credit-Land.com is an independent, advertising-supported web site. Credit-Land.com receives compensation from many credit card issuers whose offers appear on our site. Compensation from our advertising partners impacts how and where their products appear on our site, including, for example, the order in which they may appear within review lists. Credit-Land.com has not reviewed all available credit card offers in the marketplace.

Credit Card Applications » Research » Guides » Cardholder Benefits » 5 Things You Should Know About Your Credit Card

5 Things You Should Know About Your Credit Card

By
Add to Favorites:

You don`t know your credit cards as well as you think. Credit cards have lots of loopholes that can catch you off guard. Like should you choose a frequent flier card or a basic rewards card? What time of the year is the best time to do a balance transfer? If I die overseas will my credit card pick up the bill? See, things you don`t think about, but very valid questions, nonetheless. You don`t have to have a slew of financial mishaps to see the negative effects on your credit report, even one or two bad decisions can send your credit score plummeting.

Here are some of the most common credit card mistakes that you can avoid:

  1. Getting a card just because of its rewards. While a slew of rewards and racking up points for your purchases can seem like a lot of fun, it can lead you down the road to debt. Many rewards card require you to spend a minimum amount of money in order to see the rewards, for some cards minimums can be $1,500 worth of purchases. Also, rewards differ from card to card, some cards offer one to five percent cash back depending on the time of the month, and others simply offer points per dollar spent. Rewards cards are also known for their notoriously high APRs, some over 20 percent. If you are signing up for a rewards card solely for the rewards you will receive, you may end up acquiring more debt in pursuit of rewards.
  2. Cashing in on those credit card checks.Those nifty little checks that your credit card sends you are actually the same as a cash advance. Cash advances usually carry expensive fees and high interest rates. Cash advances are always costly, so think about that before you cash one of those credit card checks.
  3. Reaching the limit too quickly. Don`t go on a shopping spree as soon as you get the credit card. Well, you can, as long as you don`t get close to your spending limit. At any given time, you should have two thirds of your spending limit available. If you keep a high balance on your credit card it can reflect poorly on your credit score, and you may be required to pay monthly installments that are higher than what you normally pay.
  4. Paying late.This is one of the biggest offenses to your credit card, but it is the one thing that is within your control. If you continue to pay your bills on time and if you pay slightly over the minimum balance your debt will be eliminated and your credit score will be affected positively. If you repeatedly miss payments or pay late, your credit card company may penalize you in other ways. For example, your low interest rate could skyrocket to almost double the amount. If you want to save money and protect your credit score, paying your bills on time is the best way to do it.
  5. Committing to many balancing acts.While balance transfers are helpful, they won`t erase your debt for you. You have to commit to paying off the debt within the introductory time period in order for a balance transfer to be worthwhile. If you fail to pay off your debt after your first balance transfer, continuing to do so can be bad for your credit score and your debt.

Add to Favorites:
Get the latest news, articles and expert advice delivered to your inbox. It's FREE.

Related Research:

5 Reasons to Get the Capital One Venture Miles Rewards Card

5 Reasons to Get the Capital One Venture Miles Rewards Card

By Herbert Moore, Posted: January 18, 2017

If you’re looking for a great travel rewards credit card—one that offers unlimited earning opportunities, flexible redemption, and lots of perks—look no further. This card from Capital One has you covered. Continue reading
Credit Card Tips For Holiday Shopping 2016

Credit Card Tips For Holiday Shopping 2016

By Herbert Moore, Posted: November 23, 2016

November and December are the busiest months as gift shopping reaches its peak. People rush around looking for the best gifts and the best deals leaving a lot of money in the shops. Holiday season may force you to go over the household ... Continue reading
Credit Cards to Save More on Holiday Shopping

Credit Cards to Save More on Holiday Shopping

By Herbert Moore, Posted: November 22, 2016

Discounts and special offers are available all year round. Werther you are a bargain hunter or an impulse buyer, make sure you check online discounts and special offers. Also, if you are a cardholder, see if your credit card opens the door ... Continue reading