Now more than ever, credit cards have already become an important part of the lives of Sri Lankan thanks to the convenience they offer.
You can use your credit cards for almost anything and everything right now. To make things even better, your credit cards can even help you save money and earn exciting rewards as long as you use them responsibly.
Credit cards, however, can also become heavy financial burdens if you don’t handle them well. So, before you swipe that plastic, make sure you avoid these top five mistakes.
Paying your bills late or not making any payments at all is problem the number one mistake you can do that can cause you the most harm. Late payments can affect your credit score and the interest and late fees can add up fast before you know it.
Aside from the consequences that can affect you right away, it may also take you several years to recover from several late payments. When you just leave them be, your account can get written off as a loss and this can stay on your credit report for years.
It doesn’t matter if you have one card or more because you always need to keep an eye on the total available credit you are using. Your credit score will suffer if you use more than 30% of your available credit.
Maxing out your credit card may make you end up with potential fees and a penalty interest. Try using your card only for those purchases that you know you can pay off right away to keep payments manageable and maintain a low balance.
Can you still remember the last time you actually reviewed your card statement? The credit card statement is basically the summary of all your card activities within the billing period. However, how sure are you that all these charges are really yours?
Reviewing your statement on a regular basis is a good habit to develop. This is one of the best ways to prevent unauthorized charges and fraudulent expenses and let you report errors right away.
Call your card issuer right away when you notice suspicious charges. You can find the issuer’s contact details on their verified website or on your statement. Make sure you report discrepancies, big and small amounts alike.
Your credit score will take more hits if you also apply for more credit. Applying for several credit cards in a short span of time will raise a red flag to potential lenders. Always apply for a new credit card only when you need it. You also need to avoid applying for a new card if you took out other loans like a housing loan or car loan recently.
Many people make the common mistake of overspending when they have a credit card. Charging your card near its limit is a big no-no. Coming close to your limit can affect your credit score.
These are just some of the most common mistakes that Sri Lankans need to avoid to make the most out of their credit cards.