5 common credit card mistakes and how to avoid them

American financial consumers are heavy users of credit cards. A recent Experian poll found that 62% of Americans had between one and five credit cards.

With so much familiarity, you can think that consumers know how to optimize their card experience. But ask the average card user about common (and costly) credit card mistakes and you’ll have enough.

“A few years ago I was traveling to the US on vacation with my family,” said James Gall, founder of Money Builders, a UK-based consumer finance website. “I wanted to take a credit card and after some research I found a card that did not charge any commission on US dollar transactions.”

While traveling abroad, Gall could use the card at any store or restaurant at no cost – a big plus for an expensive vacation. “I built up some big debt on the card, but neglected to pay any attention to the high interest rate once we were home. I ended up having to transfer the debt to another card after accumulating too much interest at an appalling rate, ”said Gall, who said he made a fatal mistake with credit cards.

“I didn’t read the fine print,” he admitted.

To learn more about the different types of credit cards available and how they can help you improve your financial situation, visit the Credible Multi-Lender Marketplace. You can learn more about the fees, APR and benefits of various cards in one sitting.

5 of the biggest credit card failures people have

Mistakes, nonsense, brain cramps – call them whatever you like. Consumers regularly make costly mistakes when flashing their plastic. These are the most common and costly direct mistakes made by card users, according to financial specialists.

1. Use debit cards instead of credit cards when shopping online
2. Lack of additional cash rewards
3. Assuming the credit card debt is canceled
4. Not being careful when canceling a rewards card
5. Make only minimum payments

1. Use debit cards instead of credit cards when shopping online

Never use a debit card when purchasing products or services online, experts advise.

“If you get ripped off, a debit card offers extremely limited protection, and if you fail to catch a bogus charge fast enough, you could literally lose every penny in your bank account,” said Monica Eaton-Cardone, owner of Chargebacks911 a cybersecurity company that works with credit card providers. “Credit cards protect you in a much more comprehensive way. Indeed, credit cards are protected by the federal government against the main categories of fraud, but unfortunately the same protections are not extended to debit cards. “

For those who believe that credit cards can take their financial game to the next level, visit Credible to compare cards, rates, rewards and more.

CREDIT CARDS VS. DEBIT CARDS: WHAT TO USE?

2. Lack of additional cash rewards

Many reward credit cards these days offer bonus cash or points when using the card at a certain merchant – but card users don’t always tend to take full advantage of them.

“These bonus offers can change on a monthly or quarterly basis, but they’re easy to ignore and miss if you don’t check your email alerts or log into your credit card account regularly,” he said. said Andrea Woroch, a consumer. financial expert at AndreaWoroch.com. “Don’t assume that you are automatically eligible for the additional rewards. You must actually subscribe to the offer to be eligible. “

Credible features some of the best credit card options available, especially if you’re interested in rewards programs. Check it out here.

CASHBACK VS CREDIT CARD. REWARDS: WHICH IS THE BEST?

3. Assuming credit card debt is canceled

Keeping your credit card balance low is not only important for your own financial health, but also for the financial well-being of your family.

“It’s because the debt is usually passed on to your family – your spouse, your kids or your parents – if something happens to you,” Woroch said. “Therefore, it is important to have a back-up plan, such as a life insurance policy, [which] can protect your family’s financial future because it can be used to pay off your debts, including credit card balances. “

ANY UNEXPECTED ELEMENTS OF THE CREDIT REPORT ARE DISPLAYED? THIS COULD BE WHY

4. Not being careful when canceling a rewards card

Many credit cards have proprietary point systems that do not favor canceled cards.

“These can be extremely lucrative and can be bundled across multiple accounts, but once you close the last of your accounts those points are gone so make sure you use them or transfer them first,” Erik Budde said. , CEO of GigaPoints, a credit card advisory platform. “Even a savvy credit card user like me made this painful mistake – it cost me about $ 1,000 in lost points.”

When looking for a rewards credit card, visit sites like Credible, where you can browse through many card options without damaging your credit score.

HOW TO QUICKLY INCREASE YOUR CREDIT SCORE

5. Make only minimum payments

While cardholders should be making regular payments on credit card bills, a drop and a minimum payment each month can trigger financial problems. “This will slowly cause you to take on more debt each month and pay higher interest,” said Tegan Phelps, founder of The Blissful Budget, an online finance platform for households. “To avoid this mistake, make sure you have the cash to pay off the balance each time you use the card, or make additional payments throughout the month to avoid accumulating unnecessary debt,” he said. said Phelps.

Visit an online credit card marketplace like Credible to compare card options and choose the best options.

HOW TO AVOID CLOSING YOUR CREDIT CARDS