A credit card is a horrible thing to waste. Sadly, people do it everyday by misusing their credit cards. Misusing your credit card can have a negative affect on your credit card score and can affect your ability to get low-interest credit cards in addition to low interest mortgages and auto loans. Your credit card doesn`t come with a manual, so there are some things that you should be thinking about when making purchases with your credit card, so you don`t hurt your credit score. Here are some credit card mistakes to avoid:
1. Using an annual fee credit card and forgetting about it. Sometimes credit cards with annual fees have better offers than those credit cards without annual fees, but if you end up forgetting about the annual fee it can end up being a costly mistake for you. If you do choose a credit card with an annual fee, make sure to make a reminder on your calendar concerning when that annual fee payment is due.
2. Giving Out Your Personal Credit Card Information. Sure that person may seem like a friend, but why chance it. If you give someone your credit card number it will be harder to prove that this person made unauthorized purchases. Even if they didn`t directly make the purchases, they can sell your credit card information to someone else who will commit identity theft or make purchases that will damage your credit score.
3. Using Your Credit Card Like a Debit Card. This can get you into a lot of financial trouble. Your debit card works off of funds that you actually have, credit works off of funds borrowed. Don`t take out money from an ATM using your credit card, as you will be subject to high cash advance fees.
4. Not Checking Foreign Transaction Fees. If you travel across the world, it`s important to check the foreign transaction fees on your credit card. They can range anywhere from three to five percent, some credit card issuers, such as Capital One offer cards that don`t have any foreign transaction fees. Foreign transaction fees are charged whenever a consumer makes a purchase overseas using their credit card. The foreign transaction fee is an extra charge added onto the cost of the item, it ranges from zero to five percent of the transaction – depending on which credit card you have.
5. Lending someone your card or card number. This is a recipe for disaster. If you give someone your card number, he or she may go wild making purchases. Protect your account by refusing to give out your card or card number.