Many people have enhanced their purchasing power with the help of credit cards. Besides shopping, credit cards can be used for a variety of reasons. People are satisfied with the rewards offered by credit cards on making payments. Due to greater rewards and cashback, credit cards gain an edge over debit cards. Credit card comparison is possible now due to the presence of many service providers. However, credit cards should be used responsibly to avoid debt and credit shortages. Read on to know three common mistakes committed by credit card owners and how to avoid them.
- Not depositing the credit card bill timely
Many credit cards users fail to pay their credit card bills before the deadline. Failing to pay the credit card bill before the deadline hampers your credit score. Your credit score will keep rising if you pay your bills on time. Some credit card users do not take timely repayment seriously and pay the price later. Credit card providers also imply late fee charges if the deadline for repayment is missed. You may also be deprived of some cashback and rewards that are provided after the timely payment of credit card bills. Even if you have chosen a lenient service provider after credit card comparison, you still have to pay extra charges on late repayment.
Owning a credit card may not be hard but maintaining it is a challenge. If you fail credit card bills consecutively, you might start getting calls from the credit card provider. In the worst scenario, you might even get a visit from any representative of the credit card provider. Some credit card owners think they might ditch the credit card provider and search for another after failing repayment deadlines. Well, your credit score will decline, and you may not find any credit card provider that will entertain you. Once you are marked as a defaulter, every finance professional can see it. You may pay the price by not getting any credit card limit in the future.
Why do people fail to repay the credit card bill before the deadline? Some of the reasons why people fail to pay their credit card bills before the deadline are as follows:
- People spend more than their repayment capacity via a credit card.
- People don’t care about their credit history and credit score.
- People cannot keep track of their spending and end up getting more than expected credit card bills.
Having a credit card does not imply that one can spend carelessly. Be aware of your repayment capacity and spend only that amount of your credit card limit. By paying credit card bills before the deadline, you might get a discount.
- Neglecting incentive programs
The maiz purpose of using credit cards over debit cards is to earn rewards. Most credit cards users miss chances of lowering their credit card interest and bill amount. Every credit card provider offers several discounts, loyalty programs, and cashback to users. You may earn a reward while making payments with your credit card on any purchase. You might also get a discount while depositing your credit card bill on time. Some common rewards offered by credit card providers are as follows:
- Cashback on paying the credit card bill on time.
- Extended warranty for any product or service from any specific provider.
- Early bird discounts on paying the credit card bill before the deadline.
- Increased credit limit on demonstrated responsible credit behaviour.
- Greater credit card limits due to good credit history.
- Rewards through loyalty and referral programs.
As a credit card user, you should know about the benefits offered by the provider. You can avail of credit card discounts and cashback every time you make payment. Awareness is the key to unlocking all your credit card benefits. Usually, credit card providers send SMS/email to users and inform them about the latest schemes and discounts. You can also reach out to the customer support of any credit card provider to know about the latest offers and discounts.
- Paying the minimum due amount in every billing cycle
Most credit card users prefer to pay the minimum amount for credit card bills. Paying the minimum due amount will not hamper your credit card score. However, your credit score will not rise rapidly by making minimum payments. Why pay more credit card interest by making minimum payments in each billing cycle? If you got something extra, pay more than the minimum amount to lower the overall interest. There is no need to rack up unnecessary interest charges when you can pay the bill at once.
With owning a credit card comes the responsibility of using it wisely. If you want to reap longer benefits, use your credit card limit wisely and pay your bills timely. Start paying your credit card bills before the deadline!