Warning : These 9 Improper Use Of Credit Card Will Make Your Life Difficult
Till now, the use of credit cards cannot be separated in fulfilling the needs, and more than that, the credit card is also used as part of the life of modern society.
Have you read the news about those trapped by credit card debt? With debts piling and often they also have to deal directly with the debt collectors.
The following are the mistakes of credit card use that can cause users to get into debt.
1. You are ignoring reports of your credit card usage
So why should you be concerned about reports of credit card use? Because from here you can do a plan to manage your finances.
As a reference, you can monitor and control your finances easily, and you can manage your monthly or weekly budget.
Many people ignore this, and unknowingly, their financial consequences become uncontrollable. They live in a wasteful financial style and of course, this is a difficult life.
2. Usage that exceeds credit card policy limit
Often using credit cards and exceeds the limit or also called over the limit for non-essential use shows the true character of the person.
Why? Because people like this just follow his wishes, regardless of his future.
The worse is the system of credit cards warning about over limit usage even offers you to raise your credit card limit.
This will make your credit card usage become increasingly uncontrolled, and make your debt becomes higher.
3. Always put off credit card payments
When you do not pay your credit card bill on time, then they will ask you to pay a fine.
They do not care if you have no money or forget because this is the rules of credit card use.
So, the longer you arrears the payment, the greater the penalty.
When this becomes a prolonged problem, the result is your credibility in the banking world will be bad. You will have difficulty in dealing with banks, such as when you want to borrow money from a bank, then they will not give it.
4. Tempted by paying only the minimum repayments
In practice, the minimum payment will permit the users to pay the minimum installment, usually 10 percent of the total bill.
At first glance, it looks nice, but when you take this path, then the rest of the bill you have not paid plus the interest will be a big debt.
This is a trap that has successfully attracted credit card users in general. This will make users trapped in debt with increasing interest without end until sometimes they can not afford to pay the installment or bad debt.
5. Using a credit card to pay other credit debt.
Most people, though not all of them will use their credit cards to pay off other credit debts, such as a car or home loans.
Indeed this is a practical solution for emergencies, but if not careful, then they can be stuck in debt in the future.
6. Having too many credit cards
Actually, what is the reason to have many credit cards? Will it ease your business? Or will it just make your wallet thick?
Now let’s think logically, most people are tempted to have lots of credit because they are tempted by the various facilities offered.
As you know, the annual fee of a credit card is a definite cost to be incurred. With so many credit cards in your hand, it will be more difficult to control your finances.
Ideally, you just have one or two credit cards to keep the transaction you need.
If you need more credit cards to use, then you should make sure you really need them and use them for the right purpose.
7. Shopping for items that are not really needed
A credit card is one of the means by the bank to gain profit.
Even after you become a user, you are often contacted about promotional offers and discounts to always use your credit card.
Did you know that many people end up using credit cards to buy things they do not need?
Again, this is a great legitimate tactic for banks to make a profit.
But life is a choice, you can also choose to use your credit card according to the needs that you really need.
8. Thinking that the credit card as additional salary
It is a big mistake when you consider that a credit card is like an extra paycheck and that means there are problems in your financial planning.
Beginners will usually be happy when their first credit card application is approved, and they will use it directly to shop. This is normal, but the normal thing would be a bad thing if you do it excessively.
You have to remember that by assuming a credit card is like an extra salary, you have actually created a deficit in your finances, which means that there will be more expenditure than income.
So, you need to realize that the credit card is nothing more than a means to help you to make payments easier.
9. Not realizing that the credit card is a debit card
A credit card gives you good. You know, without the need to have a balance, you can use it to shop.
Whatever your needs or wants will be financed by a credit card.
However, you need to realize that it is all debt.
So, using a credit card like when you use a debit card for cash withdrawal at an ATM machine is a mistake.
You must also know because there is a credit card usage policy which states that cash withdrawal by credit card will be charged with interest with a certain amount for each withdrawal.
So use your credit card correctly, because it will make your business easier.