Common Credit Card Errors That You Can Easily Avoid
Posted July 7th, 2010Credit card errors cost consumers big bucks – find out about common errors and how you can avoid making them
They would have to when you consider how much we spend on our plastic, in November of last year that number was $20 billion, just for the month. Using credit cards is not the problem, the problem is misusing them. Aside from simply spending more then one can afford the average Australian pays more in fees and charges then they ought to. This money adds up quickly, making owning credit cards an expensive practice. But, there is light at the end of the tunnel, if you can learn to avoid some of these mistakes you can save money and still use your credit card.
If you don’t repay your balance in full, consider a low interest card
If you know that each month, you are going to be faced with paying credit card interest on your purchases, you should strongly consider switching to a low interest rate credit card. This could save you a lot of money in interest repayments.
- $55 annual fee
- 13.24% p.a. on purchases
- 0.99% p.a. for 12 months on balance transfers
- Cash Advance Rate of 21.49% p.a.
- 55 days interest free
- Minimum Income Requirement of $15,000 p.a.
Five common credit card errors.
- Using plastic to pay for everyday expenses. Nearly half of all Australians use credit cards to pay for necessities like groceries and petrol. Interest free periods make using credit cards convenient without cost, but only if you are spending less then you make each month. Plan your spending so that your card balance never exceeds the amount you can pay off completely, to avoid those costly interest charges.
- Spending money on card fees unnecessarily. Some of the biggest ways credit card companies make money is by charging fees for things like late payments and going over your credit limit. These credit card errors are easy to avoid by managing your money and paying at least the minimum payment each month with a direct draft to your credit card bill each month.
- Not paying attention to credit card security. It may seem hard to believe, with all of the talk about credit card security, but around two thirds of Australians have not taken even simple steps to avoid credit card fraud. It is imperative that you pay attention to security measures and protect your account and personal information secure.
- Accepting a card that does not give you the best rates. Many people hang on to their old credit cards because it is easy or because they feel a sense of loyalty to the credit card company. But, that leads to spending more in interest and fees then you probably should. Use one of the handy credit card comparison sites and find the card that gives you the best deal for your money.
- Trying to earn rewards points. Rewards programs can be great, but only if you are paying your bill off each month. If you are spending on your card to earn points, and also paying interest, those interest fees are going to cancel out any savings from the rewards points. Only people who clear their debt each month can truly benefit from points programs, those with revolving balances are better off looking for low interest and fee cards.
By avoiding these credit card errors you will save money. Don’t ever forget that credit card companies are in business to make money and you have to outsmart them to make credit card ownership worthwhile. The best way to do that is to protect your identity and avoid paying fees whenever you can.
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