People have two different opinions regarding credit cards. Some people will say that credit card is beneficial in an emergency situation and many people will say that credit card is a trick and will cheat you so you should not use them. But credit cards can be good or bad depending on how you use them. In this blog post, you can learn how to use credit cards properly and how you can avoid 7 credit card mistakes.
Common Credit Card Mistakes:
- Paying your annual fees without speaking with the customer care executive
Do not pay money without discussing our Credit Card annual fees with the customer care executive. This is the biggest mistake we make. 70% of people do not know that there is a customer care executive for matters related to annual fees. Why should we contact the customer care executive, you can negotiate the annual fees. 100% assurance cannot be given for this but it may vary depending on some banks.
- Not Increasing Your Credit Card Limit
Many of us are using credit cards but no one ever increases the credit card limit. Because many people think that increasing the credit card limit will result in more charges and expenses, for example, if your credit card limit is 50,000 and you spend 20,000, your utilization will be 40%. If your credit card limit is 5,00,000 and you spend 20,000, your utilization will be 4%. So your 4% utilization is less than 40%, so your Cibil score is higher.
- Not Asking for an Upgrade Credit after 1 to 2 Years
If it has been 1 to 2 years since you bought the credit card, you should not use it without upgrading it. There are many benefits of converting your normal credit card to a premium credit card. Your transaction is very important to get a premium credit card.
- Not using your Reward Points
Many people still don’t use their credit card reward points and some don’t even know they have reward points. 40 to 50% of people never use Credit Card Reward Points. The validity of these Reward Points is only 2 to 3 years. Check your Credit Card Reward Points and use them properly.
- Paying Minimum Bill
There are two methods of Bill Payment for Credit Cards. One is the Minimum Payment and the other is the Entire Amount of Payment. Many of us have been paying the Minimum Payment instead of the Entire Amount Payment. That is the big mistake here. When you pay the minimum payment, the interest rate for you will be higher. So you should pay the entire amount as much as possible.
- Closing an old credit card
Many people buy a new credit card after closing the old credit card. When you close an old credit card, your credit history is gone. This will affect your credit score. So always convert the credit card without closing it.
- Applying for too many cards frequently
Many of us approach many banks to buy new credit cards. Because when more expenses come up, we buy a lot of credit cards to deal with them. If you continue to do this, the bank will decide your financial status because the budget is not correct. Due to this, if you want to buy a loan in the future, you may not be able to get it.
By avoiding these types of Common Credit Card Mistakes, your credit score will be higher. This way you can get loans, benefits, rewards, etc. in the future. So think while buying a credit card and buy the card that suits you. By avoiding these types of Common Mistakes, there will be no problem with the Credit Card.