Top 10 credit card mistakes to avoid

[financialhelp]

Many people end up hurting their credit rating through making these 10 common credit card mistakes. I hope this information can help you avoid making the same mistakes as others.

1. Applying for a card limit you can't repay.
2. Appying for too many credit cards at once.
3. Using the cash advance option often.
4. Only paying the minimum payment.
5. Maxing out your credit card.
6. Making late payments.
7. Failing to check your statement regularly.
8. Adding a secondary user on your card.
9. Using your credit card overseas.
10. Failing to read your credit card agreement.

If you can avoid making these common mistakes you can improve your credit standing and be more on top of your credit.

Robb

[disneysteve]

#1 isn't quite true. I mean it is, but it isn't relevant. Our credit cards have a combined limit of over $100,000. We could repay that if we absolutely had to, but it doesn't matter because we would never charge that much. You should limit your charges to 30% of the limit or less.

For #3, I would say using the cash advance option ever. It should not be used. Just forget it exists, just like 401k loans and Roth redemptions.

#9 may or may not be true. It depends on the card and the terms of use.

[asmom]

Why not #9?

[jeffrey]

The number one credit card mistake doesn't seem to be listed - using a credit card when you don't have enough money in the bank to pay it off when the bill comes due. If you don't pay off your credit card in full each month, it's a liability and not an asset.

[disneysteve]

Originally Posted by asmom

Why not #9?

Many CCs charge an added fee for foreign transactions. That can add 2-3% to each purchase.

Originally Posted by jeffrey

The number one credit card mistake doesn't seem to be listed - using a credit card when you don't have enough money in the bank to pay it off when the bill comes due. If you don't pay off your credit card in full each month, it's a liability and not an asset.

Absolutely right! #1 on the list should be not paying the bill in full each month. That is by far the most common mistake CC users make.

[kork13]

Originally Posted by disneysteve

Many CCs charge an added fee for foreign transactions. That can add 2-3% to each purchase.

Does anyone know of a way to avoid this? There's a fair chance that my next assignment will be overseas, so just about all of my CC usage would be "foreign transactions".... any suggestions?

[disneysteve]

Originally Posted by kork13

Does anyone know of a way to avoid this? There's a fair chance that my next assignment will be overseas, so just about all of my CC usage would be "foreign transactions".... any suggestions?

There are CCs that don't don't have a fee. I think the Schwab one is among them.

[jeffrey]

Originally Posted by kork13

Does anyone know of a way to avoid this? There's a fair chance that my next assignment will be overseas, so just about all of my CC usage would be "foreign transactions".... any suggestions?

Get a credit card in the country where you are assigned, but don't cancel your credit cards in the US. Credit histories from foreign countries don't transfer (except Canada) so if you cancel everything, you'll come back to the US with no credit history which is just as bad as a bad credit history.

[croland]

I agree not paying in full each month should be in there, but I do like #1. I've seen too many get into debt just because they can, even if they can't afford it.

[reptile411]

Doing just about anything on that list means you are living beyond your means and is not good.

[nmboone]

Actually, I didn't even know about #8!

[boosami]

Originally Posted by nmboone

Actually, I didn't even know about #8!

#8 is where you add a friend, significant other, or spouse to your card and they charge it up without you knowing without intent to pay it off.

[Bimmer]

Getting a credit card, period, should be number one. Too many people do not know how to use them (pay off balance every month, get a card with good rewards, only use for needs instead of wants, etc).

[disneysteve]

Originally Posted by Bimmer

Getting a credit card, period, should be number one. Too many people do not know how to use them (pay off balance every month, get a card with good rewards, only use for needs instead of wants, etc).

I disagree. There is absolutely nothing wrong with getting a credit card. The problem is what you said next - people who misuse them. I hate when people blame the credit card or the company. The card isn't the problem. The user is the problem.

[Goldy1]

Frankly, the main pro to using a cc for me is not having to carry a lot of cash. If I want to go to a store and spend $100, I dont' want it in my purse.
I am a new mom and dropped my purse in a mall parking lot. The whole fumbling with a stroller and diaper bag also is new to me. I was fortunate enough to have an honest person turn in the purse.

Also, I enjoy the benefits of getting the cc rewards. I just got a $50 jc penny gift card in the mail all from using my cc. Last time, it was $100 and paid for my son's portraits at jc penny.

A lot of people can't handle cc's. College kids should have one fo remergencies with a low limit in my opinion. I had one then for such reason. I bought my own groceries in cash. One day I went over $10 wha tIhad in my wallet so I used the cc in the bind(I guess in hindsight Icould have put some stuff back) btu it was not for hot date outfits etc.

[tmvijai]

Originally Posted by Bimmer

Getting a credit card, period, should be number one. Too many people do not know how to use them (pay off balance every month, get a card with good rewards, only use for needs instead of wants, etc).

I also don't agree with it. CC is one of many great inventions of man kind. It is an easy way to use other people money. It is like a magic wand. If you use it properly you can get good things out of otherwise you end up badly. As steve said, it's all about how you use it. Talking of credit card, I have a good quiz posted in my website(left side of menu). Check out when you get a chance.

[reptile411]

Me 3, My MasterCard is what started my credit and turned into my car and eventually my wonderful home. WOOHOO for credit cards. Misuse is what kills people.

[tmvijai]

Thats totally right, it takes avatars and transcends in our life in different forms. If there is no credit card, there is no credit history. if there is no credit history, not many people can afford to buy things at this time and age like car, home, rental properties and much more. 10 years ago I had nothing when I got here but now I am living the life of American dreams with car, Truck(texas is a must), home and rental property. ALl credit goes to the Credit cards.