When it comes to making mistakes in life, credit cards are not going to be the place that you want to mess up.
If you do, it’s not the end of the world since there are re-consolidation programs that make mistakes more manageable but in the end everything you charge is a debt owed and you will have to face that fact. If you can avoid these mistakes, then you will save yourself a lot of hassle and money as a credit card owner.
Mistaking Introductory Rates
Credit card companies sometimes advertise that they have low or 0% APR for the first X number of months. While this is typically true, what isn’t shown is how the rates increase substantially right after that period is up. Don’t make the mistake of thinking that there is a free lunch out there.
Even if there are some nice benefits to get your foot in the door, you’re still going to need to pay back what you owe with some extra interest and/or fees for the company to make a living too.
If you charge too much and then go over the limit for your credit card, then you may be subject to extra fees as listed in the card agreement. Almost every credit card has a certain limit for the amount of money you can put on the account.
It’s up to each card owner to watch their account and make sure that they keep the card at a reasonable balance. It’s also not great that when you have all this money owed that it needs to be paid back regardless of whether you get an overcharge fee or not.
Missing Credit Card Payments
When you agree to certain terms with people and organizations, they generally expect that you will follow through with your end. When you charge money to a credit card, you are effectively taking out small on-demand loans. Just like a long term bank loan, the company expects to get it’s money back and on time as per the agreement. When you receive a credit card statement, it will clearly state the amount due and the date which it’s owed by.
You can generally check this information online as well, so there really isn’t much excuse about forgetting. If you miss these payments, then it’s likely you will be, at least temporarily, put in credit default where interest rates rise.
You can generally get back in good terms but making the payment quickly there after and being on time in the following months but it’s not pleasant to have to pay more money simply because you missed a date. It’s probably a good idea to send payments earlier rather than later so you don’t put whether you default or not on a knives edge.