Credit cards can be overwhelming. Confusion leads people to make mistakes that can be costly in more ways than one. Here are the top five credit card mistakes that people commonly make when looking over their credit card statements.
1) Ignoring the Statement: Many people get into the habit of just paying their bill without looking over the statement. They know when to mail the check, or transfer the funds so they don’t worry about reading over the statement. Others have the bill set up on auto-draft, so they don’t even have to think about it. This can be a very unfortunate mistake because that statement is there to tell you of any changes being made on the account as far as minimum payments, APRs, and other such necessary details.
2) Not Reading the Fine Print: That fine print is fine for a reason. They keep it small so you won’t notice it, or so you won’t be bothered to try and decipher the legalize placed there when a magnifying glass is needed. In that fine print, you will find all the details of the traps these companies are ready and willing to ensnare you in.
3) Mistaking Introductory Rates for Permanent Rates: Here’s the deal folks, no credit card is ever going to offer you a permanent APR of 0%. It just won’t happen! The interest rates are how they make their money. If you have signed up for a credit card because of its advertised low APR, then take a look at your next statement and see just how long that rate is going to last, because it will most certainly not be forever. Introductory rates are just that- introductory.
4) Making the Minimum Payments: When consumers get their credit card bill, and see the amount affixed in the ‘Amount Owed’ box, many just automatically pay that much and go on their spending way. MISTAKE! That is only the smallest amount you are required to pay in order to keep your account open. That keeps your balance high, which keeps their pockets full. The longer you go about paying the minimum rate, the longer you will go on paying the minimum rate.
5) Forgetting About the Annual Fee: Many credit cards come with an annual fee. These are the cards that are most popular as they often include a rewards program, or advertise lower interest rates. They recoup these costs not only through their Annual Fees, but also from the fines they collect from people who forgot to pay those pesky annual fees.
If you are currently making any of these mistakes, then do yourself a favor and make the efforts necessary to stop those habits now. You and your pocketbook will thank me!