Credit Card Debts: How to Avoid Common Mistakes
Posted at by CreditWiz on category CreditHow can you avoid acquiring bad debts on your credit cards? You can start by avoiding these mistakes people with credit cards commit:
1. Not Reading the Small Print:
Issuers of credit cards might tell you that the reason terms and conditions are printed in smaller text is that they do not like to bore you with all the details. that’s actually where they disguise or hide the actual cost of whatever you are signing up to.
As the client, it is your responsibility to check everything and see to it that there are no any traps that you could easily trigger. If the text printed the form is too small to read, call your credit card provider.
2. Misunderstanding Introductory Offers:
It’s easy to give in to a very alluring headline. People who write these headlines are paid to make them as tempting as possible. Oftentimes, when card users pay too much attention to the pros of a credit card, they simply ignore the details, where the drawbacks are usually hidden.
For instance, if an offer states six months interest free balance transfer, look out for interest rate and transfer fee after the free period ends. Also often included in the smaller text are conditions like, if you miss one payment, whatever is left on the offer will be withdrawn.
3. Making Only the Minimum Payment:
The ease of servicing the debt is one of the advantages of using credit cards — you just have to pay the minimum percentage of your balance for each month ( 4%).
Paying only the required minimum could cost you more actually. The interest is calculated by the day. For each day that you have a balance, you’re being charged on interest for every penny.
4. Owning Multiple Credit Cards:
It’s commonly believed that having multiple cards could help their credit rating. This might be true based on how much balance you maintain on your credit cards.
The drawback is that it will make it more difficult to obtain new credit. Lenders will wonder whether you already have too much debt and may be unable to make repayments. Another negative aspect is that it increases the chances of getting deeper into debt.
To obtain more free legal advice on credit, finance, and banking, simply check out Consumer Credit Legal Service (WA) Inc. by clicking on the link given.