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There’s no doubt about the fact that you simply love your cash back credit card. But are you still aware of the way in which you can get the most from it? 58% of Americans use credit cards as their main card, as per a survey done by TD bank in 2017. At the same time, the research also reveals that we don’t make the most of reward cards. Around 1 among 5 credit cardholders leaves their rewards on the table and this increase to around 1 among 3 millennials.
Not being able to utilize your credit cards in the right manner will push you towards the vicious cycle of high interest debt. You may get online loans from Northcash to pull yourself from the debt hole but before that you need to spot the credit card mistakes which you should avoid. Let’s take a close look at the few mistakes to avoid.
Mistake #1: Paying down just the minimum balance
Paying down just the minimum monthly payment would mean paying your bill for ages. Whenever you take a long time to pay back your bill, you pay more on compounding interest rates. Hence, you should send in a bigger payment as per your affordability and whenever you think it is possible, reduce your expense areas and focus more on repaying credit card debt. You can keep compound interest from working against you.
Mistake #2: Swiping your plastics for regular items
Your monthly necessities are supposed to be paid with the help of your monthly income. Even though you own a credit card, you should keep purchases like utility bills and groceries off your card as this is the biggest way of spending under control. If you buy a gallon of milk for $30 with a card, you have to repay the balance during the end of every month along with the interest rates.
Mistake #3: Not knowing your credit score
How would you know whether or not you qualify for the credit cards? If you’re someone who is not much familiar with your credit score, you’re going the wrong way. An entire 40% of Americans don’t know about their credit score, as per a survey done in 2016. If you know your credit score before you apply for a credit card, you can be sure about whether or not the lender will reject you or accept your application.
Mistake #4: Not shopping around
Not shopping around while taking out credit cards is one of the biggest blunders that you can make. Experts always recommend the credit card holders to shop around and get the best quotes from the lending companies so that you can settle down with the best rate. Every card is not for everyone and you should always consider a card which has got a low APR.
Mistake #5: Carrying a balance
There are many who believe that paying only the minimum amount by the due date is good for your credit score but this is nothing but a misconception. In case you truly wish to have a good score, you should pay off your balance in full.
Unless you steer clear from the credit card mistakes, you won’t be able to stay away from debt. Follow the points mentioned above and try to avoid all the mistakes.