Finance Globe

U.S. financial and economic topics from several finance writers.
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Nine Credit Card Habits to Break

Many financial problems are either a symptom of or directly caused by bad credit card habits. Getting rid of the worst credit card habits will save you money and help your credit score. Here are nine bad credit card habits you should break before they break you.

Not paying attention to your due date. After the Credit CARD Act of 2009, there’s no reason you shouldn’t know your credit card payment due date. Your due date will now fall on the same date every month. So, if your card payment is due on the 6th, it will always be due on the 6th. You can mark your calendar to remind yourself to make the payment.

Charging more than you can afford to repay at once. One of the most crucial rules of credit card use is to only charge what you can afford. The bad habit of charging more than that lands many consumers in debt. Before you shop, make sure you’ve already decided a maximum spending limit. Don't exceed that limit unless you confirm your ability to pay more.

Not putting your credit card away after use. When you don’t put your credit cards away after use it’s easier for them to be lost or stolen. If you don’t use your credit card often, you might not notice the card is missing until a thief has done serious damage to your account. You should have a specific place in your purse or wallet where you keep your credit card. To reduce the likelihood of having to deal with credit card theft, always store your credit cards after use.

Taking all your credit cards when you shop. This is bad for two reasons. First, having all your credit cards in your wallet makes it easier for you to run up big balances; more cards means more credit to use. Also, carrying several cards puts you at greater risk of credit card theft since you have so many to keep up with. It’s best to carry just one or two credit cards at a time.

Making impulsive or emotional purchases. Credit card companies, product manufacturers, and stores spend billions of dollars figuring out just the right way to make you spend more money. The best way to resist impulse and emotional purchases is to shop with a list and have the discipline to buy only what’s on the list. If there’s an unlisted item you feel compelled to purchase, go home and think about it for a couple days. You can decide with a clearer mind whether you should actually make the purchase.

Paying the minimum or less than the full balance. The minimum payment habit is one of the worst you can have. When you pay just the minimum, it takes longer to pay off your balance and you’ll ultimately spend a lot of extra money on interest. Paying your balance in full every month is the best - and cheapest - use of your credit card.

Throwing away your receipts. You should keep your credit card receipts for at least 60. That’s the amount of time you have to dispute credit card billing statement errors and have your Federal rights protected. If you throw away your receipts, you’ve also thrown away potential proof of your credit card purchase amount.

Failing to review your credit card statement. The best way to detect credit card fraud and unauthorized credit card charges is by looking at your credit card statement. Each month you should read your statement, line by line, to be sure that everything is correct.

Paying just a little bit extra to all your creditors. A lot of people think they’re doing a good thing by paying more than the minimum on all their credit cards. However, that’s not the most efficient way to get rid of credit card debt. Instead, you should make one big lump-sum payment to one credit card every month until it's repaid. Then, put the big payment to another credit card and then another until they’re all repaid.

Breaking bad credit card habits starts with recognizing the you make on a regular basis. With that critical step out of the way, you can start making the behavior changes necessary to use your credit cards the right way.
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Monday, 26 August 2019

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