5 Credit Card Mistakes Almost Everyone Makes
Some people might have prejudice against using credit cards because they worry they would end up with too much debt. This is a valid reason, however, if they are used appropriately, you may end up saving a lot more than you think! Here are 5 mistakes that you should avoid especially if you are a new cardholder.
Mistake #1 – Not checking your personal credit reports
Your personal credit reports are like report cards to banks. You should ensure that the information in your credit report is accurate. Make sure your report doesn’t list any debt that you don’t have. Having inaccurate listings may make you look like a person with poor credit, thus lowering your chances of obtaining a card (or any loan) from the bank. For more information on how to obtain a copy of your credit report, follow the instructions on Bank Negara’s website.
Mistake #2 – Not tracking your expenses
Once you have obtained your card, you will probably be tempted to use it all the time, and not be bothered to remember what you spend on. That is a huge mistake. Debt can accumulate very quickly if you don’t track your expenses closely. By tracking your expenses, you can make sure that your spending is within your monthly budget, thus avoiding any debt situation.
Mistake #3 – Forgetting balance transfer cut off dates
Some banks offer 0% or lower interest rates when you transfer your card balance over to your new card. However, this offer usually only lasts for a certain period (the conditions are usually written in the fine print which many people do not bother reading). Find out when the balance transfer period ends and make sure you clear off your outstanding balances by the due date if you don’t want to be surprised.
Find out how much you can save with balance transfer.
Mistake #4 – Not reconciling your records
If you do not track your card expenses (mistake #2), you probably don’t reconcile your card records either. Tracking and reconciling your personal card records to the records of your credit card issuer can help detect any mistakes, errors or even fraudulent transactions.
Mistake #5 – Failure to update automatic payment arrangement
For convenience, many people set up automatic payment of bills every month using their cards. What happens if your old card expires and you are issued a new one? These standing orders are often forgotten. Bills can be left unpaid, leaving you with interrupted services and outstanding payments, which will not be pretty on your credit reports.