4 Biggest Mistakes People Make With Credit Cards
Credit cards can be a great tool in a solid budget, or they can be an alarmingly fast way to find yourself in debt and financial difficulty. It’s easy to fall into the trap of using your credit cards unwisely, so it’s important to be able to recognise the warning signs. Here are 4 of the biggest mistakes that people make with their credit cards.
Never Paying off the Full Balance
When you let your purchases accumulate, it makes it very hard to pay off the full balance and keep your card clear. The longer you leave it without making the full repayment, the more interest you pay and the harder it gets to ever clear your credit card debt. The trick is to only use your card sparingly, and when you know you can pay back the amount owing quickly. If you can’t commit to repaying it before the next due date, chances are you can’t really afford to be making the purchase in the first place.
Using Credit for Everyday Purchases
One of the biggest warning signs that your credit debt might be getting out of control is when you start using your card to cover everyday expenses. Things like groceries, fuel and general shopping should all be covered in your budget, and if you’re resorting to credit just to get by, then you’re likely to start slipping further and further into debt. Keep your credit card for emergencies, and ensure that you use the funds allocated in your budget to pay for your everyday purchases.
Missing Out on the Advantages of Interest Free Periods
Many cards offer enticing terms, such as 30-50 days interest free on your purchases. Of course, this is only useful if you can take advantage of it! Keep a track of all your credit card purchases, and pay off the balance within the set period to avoid paying interest while keeping your finances in great shape.
Using Cards to Pay Off Other Debt
Using your credit card to meet loan repayments or even pay off another card may seem tempting, but you are just digging yourself deeper into debt. Your credit card should be a supplementary tool to a solid budget, and really can’t be relied upon as a quick fix for debt.
If you find yourself in this situation, it’s a good idea to seek professional help. A debt solutions specialist such as Fox Symes will be able to help you work through your credit problems, and give you the strategies that you need to use your credit card wisely. As one of the leading financial specialists in debt reduction, Fox Symes has helped thousands of Australian’s get on top of their finances for good.
A credit card can be very useful, or it can bring nothing but trouble. It all depends on how you use it, and how well you stick to your budget. If you’re ever struggling with your credit card debt, remember you can seek advice from a professional financial advisor such as one of the experts at Fox Symes. Make your credit card work for you by avoiding these common mistakes.
About the Author
Tom is a finance enthusiast who enjoys blogging about a range of money-related topics.