The credit card allows for online purchases, automated payments and troubleshooting when needed. However, you need to know how to manage it well to use credit to your advantage. The 5 mistakes to avoid with the credit card will help you improve your practices.
What are the worst mistakes to avoid with a credit card?
- Leave an amount unpaid after the due date
- Not paying your credit card
- Spend to get reward points
- Make a cash advance
- Make only minimum payments
Is it possible to improve my credit rating by keeping an amount on my credit card?
Many people mistakenly think that carrying an unpaid balance on their credit card will help them improve their credit rating. This myth is false . The best way to improve your score and lower your costs is to pay all of your bills on time. Paying your bills on time also means you have the total balance on your credit card statement before the due date.
Is it a good idea to spend for “reward points”?
When choosing your credit card, you may have been sold the idea of rewards points. These points are accumulated in exchange for the amounts spent per month. However, did you know that most of these rewards programs only earn 1% or 2%? Imagine, 1% of $ 10,000 equals only $ 100. So if you are spending in order to accumulate big, you will most likely lose out in the end. It’s a think about it! If you want to choose a better credit card, try the Protégez-vous credit card comparator .
Is it a good idea to take a cash advance on your credit card?
While a cash advance could help you if something went wrong, it shouldn’t be used under any circumstances. The reason is simple: you will pay much more interest than by switching to any other type of financial product. Also note that no grace period is granted on cash advances since the interest is calculated from the withdrawal. It would be beneficial to find out from your financial institution about the other possible options.
Can I forget to make the minimum required payment on my credit card?
A major mistake to avoid is not making the minimum payments! Indeed, by forgetting to pay the minimum payment due every month, your rating will drop and there will be additional costs to pay. In order to avoid these hassles, why not register your online payment in advance, put a reminder or an alert on your mobile?
Is it a good idea to only make the minimum payments on your credit card?
Conversely, we also do not recommend that you make only the minimum payments. For example, repaying $ 30 monthly on an amount of $ 1,000, with an interest rate of 15% will take you 44 months to reach a balance of $ 0, on top of costing you $ 300 in interest. Whenever possible, we advise you to pay more than the recommended minimum. We recommend that you use our calculator to see how long it will take to pay off your credit card in full.
How do I pay off my debts?
If you’re struggling to avoid making these mistakes and you have financial worries, you may be in debt distress. If you want to have a better quality of life as well as a new financial start, we recommend that you meet with an insolvency advisor free of charge . This financial insolvency professional will guide you to the best possible solutions to your debt. In addition, these meetings are completely free, confidential and without obligation. Once this consultation is over, you will be able to turn to a solution adapted to your needs. Why not take advantage of the expertise of our professionals now?