5 basic credit card mistakes

A Credit Card provides its user with a definite prefixed amount. The bank charges interest on the amount used and various other charges. You can repay the amount used periodically after a definite period of time (billing cycle).

Credit cards are great financial tools if you use them responsibly and wisely. But problems arise when you get into some bad credit card habits.

1) Not reading credit card statements. You should review the entire statement to verify your account activity to catch unauthorized credit card charges or billing errors.

2) Mindless usage. Unless you use your credit card to earn rewards and make sure to pay off complete credit card balance every month, you shouldn’t opt to use your credit card for every purchase.

3) Paying only the minimum. It is a lot easier to make the minimum payment. But you will be paying much more finance charges than you have to by paying only the minimum.

4) Late payments. When you miss a payment, or pay late, you will have to pay a late fee on top of the interest for the outstanding balance.

5) Cash advances: They are the most expensive types of credit card transactions and have the highest interest rate. They don’t have a grace period.