Credit Card Mistakes

1= . &nbs= p; a) NOT READING THE SMALL= PRINT. Before you sign up, be sure you know the card’s interest rate and h= ow it is calculated, the grace period, fee schedule, and other terms. Once y= our card is activated, your credit card company is obligated to notify you of= any changes in the terms of your account. Be sure to carefully read this information. If you don’t like the terms, look for a new lender. Also, b) NOT UNDERSTANDING THE BIG PRINT or BEING MISLED BY INTRODUCTORY RATES. Watch out f= or credit cards with low initial “teaser” rates that increase significantly after a few months. Be aware, too, that sometimes the low initial rate applies only to balances you transfer from an existing card – and not to new purchases.

2= . &nbs= p; PAYING JUST THE MINIMUM = PAYMENT DUE. When you pay just the minimum due on your credit card, you’re stretching out the repayment period and adding to your overa= ll interest cost. Each month, you should allocate as much as you possibly ca= n to more quickly pay down your credit card debt.

3= . &nbs= p; TAKING CASH ADVANCES. Plan ahead and avoid using your credit card for quick cash at a cash mach= ine. Cash advances often come with high service fees and higher interest rates= . To make matters worse, your payments may be applied first to your lower-inte= rest balance.

4= . &nbs= p; BEING LATE WITH PAYMENTS= . Credit card companies charge a late fee – which could be as high as= $30 – even if you’re just one day late. To be sure your payment arrives on time; mail it at least 10 days in advance. Some issuers allow = you to make last-minute credit card payments by phone or via overnight delive= ry service. You’ll pay a fee, but it’s likely to be considerably less than a late payment fee.

5= . &nbs= p; NOT CHECKING YOUR MONTHLY STATEMENT. If you spot a problem, immediately notify your card issuer by phone and follow up with written correspondence. Be sure to send your note to the address for billing complaints (which may be different f= rom the address to which you send your payments).

6= . &nbs= p; HAVING TOO MANY CREDIT CARDS. There’s little reason to have more than = two national credit cards. If you have credit cards you no longer use, contact the issuer and arrange to close the account. Too many open credit cards – even if they have zero balances – may cause a lender evalua= ting your mortgage or other loan application to question what would happen if = you ran up balances on all of them.

7= . &nbs= p; CHOOSING A CARD FOR THE WRONG REASONS. Some credit card holders choose a card = to earn free airline miles or cash rebates – without regard to the card’s annual fee or interest rate. In the end, they may end up pay= ing more in fees and interest than the value of the benefits they receive. Mileage and rebate cards mig= ht make sense for those who pay the= ir balance in full each month, but if you don’t, there̵= 7;s a good chance you’re better off with a no-fee, low interest rate ca= rd.

8= . &nbs= p; NOT SHOPPING AROUND FOR THE BEST INTEREST RATE. Credit card rates and ter= ms vary greatly. Financial publications and the Internet are good sources to find the best credit card options. If you already have a major credit car= d, discuss rates with your card issuer. In many instances, customers in good standing can negotiate lower rates.