Credit card mistakes to avoid
Credit cards can be a great option to provide you with money when you need it, however you do have to be careful that bad habits, such as mismanagement or overspending, don’t lead you to financial ruin.
As we know, the road to debt is often paved with good intentions. Reinvent your financial plan by taking note of some of the biggest credit card mistakes you can make, as well as tips on how you can stay in the clear.
Understanding the terms of your credit card
Before you sign on the dotted line, ensure you read the fine print. You could be stung with additional fees or higher-than-planned monthly repayments by not first understanding the terms of your credit card. Ask about balance transfers and interest rates throughout the term of the card as these can change following a ‘honeymoon’ or interest-free period.
Increasing your credit limits
While this may seem like common sense, it can be hard to follow through with – particularly when you’re in a tight spot. If you find that you have reached your credit card limit, refrain from increasing the ceiling. While extending your borrowings may provide you temporary financial relief, your monthly repayments will increase and put more strain on your budget.
Use balance transfer options wisely
Most credit card providers offer balance transfer options to help you pay off the credit owing. It’s important, however, that you are aware of the terms of the balance transfer period. If you do not cancel a previous credit card, do not pay back your balance within the specified interest period or begin charging purchases to your card without completing the balance transfer, this offer could quickly become more harmful than helpful. At Beyond Bank we have discounted rates for balance transfers. Check out our Low Rate Visa Credit Card to get more information.
If you cannot meet your credit repayments each month, you are most likely spending beyond your means and creating more debt than you can pay back. Stay on top of your payment schedule by setting calendar reminders each month. If you do find yourself consistently making late repayments or only being able to pay back the bare minimum on your card, it’s time for you to set up a financial plan and get your finances in shape before your debt snowballs out of control.
If you have any bad habits that you feel might be holding you back, visit your local Beyond Bank branch and we can talk through options, which can help put you on the road to financial recovery.