Credit Card Tricks You Need to Avoid
So many people are just attracted to the credit card. It’s always been like that in the past and it still holds true today especially among the young professionals. It’s so easy for people to be tempted to get a credit card even though it is really not necessary. But with the irresistible offer presented to them such as rewards and rebates, many jump on the chance to get one right away.
At this point in time when numerous reports and research findings have confirmed the negative side of the credit cards, consumers should also have become more cautious in using the plastic. Unfortunately, some fail to fully understand the terms and conditions of credit card companies that many of them end up in debt which they already find difficult to settle.
So being educated is an important consideration when using a credit card of any type. Unknown to some consumers, there are tricks involved that somehow lead you to incur high balances. Find out about them here and learn your lesson.
The monthly minimum. For those of you who have the habit of paying just your monthly minimum amount due, it’s time for a chance. It’s because some credit cards charge an additional five pounds if you continue to do this. This is also not a good attitude because it will only cause you to be in debt for a longer time. So pay more than what’s required each month to pay off your balance faster.
Low interest rates. Sounds too good to be true but it’s not always the case. Credit card rules in the U.K. require that at least two of three borrowers applying for a card should be offered the usual APR but then again, if you don’t have a good credit rating, you will never avail of this low interest rate as advertised. Most often, those who have established good credit records can enjoy this or can request for this.
High credit limit. Who wouldn’t be excited over an offer of a high credit limit or receiving a letter from a credit card company saying that your credit limit has been increased? Yes, it may be a great privilege but if you’re somebody who is an impulsive buyer or who is not serious about budget management, for sure you will be tempted to use your card often with the thought that you have a high credit limit. This high limit may only do you good if you know how to pay off your balance right after you get your monthly bill.
Late payment. Make it a point to pay your bills on time. Paying late will cause you to incur fees and if you registered for a zero percent deal, you may no longer enjoy it as banks can withdraw the privilege. What will happen next is you incur interest.
Cash withdrawal. Avoid using this feature because of the fees involved. A certain percentage is charged to the amount you withdraw and then there’s a minimum charge as well. You also need to know that interest applied to withdrawals is even higher than that of regular purchases.
If these issues are complicated for you, then an affordable option is taking out a short term unsecured loan instead such as the cash advance and payday. They are not only reasonable but fast and easy to obtain as well.
