We all make mistakes, it’s in our nature. Sometimes we make them because we don’t know any better, and oftentimes we make them even though we do.
A lot of us have made some pretty big flubs with the plastic and so it’s always good to get some helpful reminders of great credit card tips so we can avoid the past blunders again.
Believe me, you can definitely get out of credit card debt and start working in the right direction with your personal finances by avoiding some of these credit card mistakes:
1. Not Paying Attention to Due Dates
This recently happened to me. I got my email notification of the statement, logged it in the back of my mind that I needed to pay that bill and unfortunately got busy and never bothered to pull that statement out of the back of my mind until two days after the bill was due.
I know what you’re thinking – just automate your bill pay! Yes, I should do that, but I do like to take a look at what’s on the statement and make sure everything is correct. This forces me to do that.
Making a late payment even if it is only by a few days can rack up ridiculous charges that only compound your debt. Those annoying charges can also have an impact on your credit report. Being vigilant about paying your debt and paying it on time is key.
What I’ll do is give American Express a call and see what they can do for me. Since I don’t carry a balance, normally pay on time and have been a long-time, loyal customer I’m hoping they’ll waive those charges for me.
2. Not Paying Your Bill in Full Each Month
This is where it all begins doesn’t it? You’re a willing victim to the crazy cycle. You buy something you can’t afford and think, “I get paid in two weeks, I’ll just put it on the credit card and as soon as I get the bill I will pay it off” and then something else comes up.
Emergencies happen or you find some other trinket you want to buy and you put that on your credit card too. At the end of the of the month you receive a hefty bill. What do you do? If you only pay what you can and wind up leaving a balance on the card that accrues interest at insane amounts, you’re asking for trouble and perpetuating the cycle!
Just think, with a little discipline and some self control you could’ve avoided unnecessary spending and used that money to open a Roth IRA or fund some other type of investment account.
3. Not Realizing You Have Credit Card Problems
Okay, this sounds silly, how can you not recognize that you have credit card problems? Well, it’s actually fairly easy. I spent the majority of my college years and shortly after living the high life without any regard to the thousands of dollars I was racking up!
I didn’t even realize that I had a credit card problem. I just figured this was a normal part of existence and that once I made more money, then I would pay off that debt! No big deal right?
Little did I realize that I needed to make some drastic changes! Get real with yourself and ask if you’ve got some spending issues.
4. Not Negotiating With Credit Card Companies
It puzzles me that more people don’t call their credit card companies to negotiate with them. You can negotiate things like interest rates, late payment fees or even payment plans. If nothing else, it doesn’t hurt to give them a call and find out what they can do for you.
The person who never asks, never receives. Now of course there is no guarantee that the credit card company will do anything, but wouldn’t it be nice to know if they were willing to do something?
Getting out of debt is not easy, but don’t make it harder on yourself by making simple mistakes that can easily be avoided.
What Other Tips Would You Give on Avoiding Credit Card Mistakes?
{ 10 comments… read them below or add one }
Ouch. That’s unfortunate that you missed your payment date. I’m also against setting up automatic bill payments, because I like to verify all the charges as well.
One method I’ve considered to handle this issue is to set up automatic bill pay and for an email notice whenever your bill comes due. That way, you can still verify the charges on your card before the due date. If there’s a discrepancy, then you can suspend the bill pay and contact your company to resolve the issue.
Or you can just sign up for an email notice, check your charges immediately, then schedule for a payment to post on the due date. As long as you have money in your account, there shouldn’t be an issue.
Credit cards can be dangerous financial weapons, for you or against you.
Usually you can get one late fee removed if you have had a good payment history with the company. Plus, they should not report it to credit score agencies unless you are late over 30 days.
I only carry a balance if it is promotional rate of some type, that lasts for the life of the transfer. I do not like balance transfers among cards all the time.
I’m kind of surprised to hear so many responses (and the initial article) advocating the use of credit. Time to dig Proverbs back out? (the borrower is slave to the lender).
Cut up the cards today, pay them off ASAP, then close the account. I’ve lived without them for 4 years. Haven’t missed ‘em at all.
Erik – you are right, Proverbs does say that, but I don’t think the Bible prohibits the use of any and all debt. I think we need to be wise in how we use and certainly shouldn’t abuse it!
Good topic.
I like the idea of avoiding debt. Who actually likes debt?
I mean is getting something now and paying later. With credit cards, this falls within that realm. You get something now, and pay later. Technically, it is debt.
That said, it has become sensible to use credit cards, to the extent that you have no annual fees and you can earn “cashback” or “rewards.” The key is to have the self-discipline to pay it every month, on time, without risking running short. I agree with the idea of setting up an email alert when the bill is ready, and also making sure that you keep your account flush with a comfortable level of cash – not excessive, but enough that you know you will be able to pay it without a problem each month.
They key is discipline – if you have that, then credit cards can be used as a convenient, time and cost effective way to pay for purchases. In that way, if you have self-control, it is not much different that cash – just simply a short-term credit vehicle. Pay your bills in full every month, and be mindful of the due date every month. Then, you don’t have to worry about interest rates or other issues. If you don’t have self-control, it can go toward being a longer term, interest-paying situation, which offers you little benefit and is NOT living within one’s means. If discipline is an issue, then I would recommend paying cash.
Jason, there are (as I’m sure you know) many passages in Scripture that highlight how credit, debt, and ‘striking hands in pledge’ are all very bad for both the lender and the borrower. Could you please show me where you find any type of support for use of credit and/or use of debt?
Erik, I don’t disagree with you that debt can be very bad, I just don’t think the general use of credit is a sin issue. I think it’s a conscience issue.
I think the abuse of credit and spending more than you make (which leads to debt) is most definitely not good stewardship and in many cases needs to be repented of.
Great tips! And you know what? None of them were that difficult, they are all relatively easy (except the self-control one for some) so why aren’t we all making wiser more credit-conscious decisions? It’s beyond me, but before I sound snotty, I learned the hard way too.
Another negotiating tip for people to remember is calling car insurance companies.. Getting a lower car insurance bill is usually fairly easy to do, plus you can ask about ways to get some discounts. You can save quite a bit this way. (Just another example of comparison shopping, really.)
You are correct, Jason. To the best of my knowledge, nowhere in the Bible is debt specifically labeled a sin. You mention that credit cards ‘can be bad’ which implies that there can be good uses as well. What good uses would you see?
Before you answer remember that all the freebies, goodies, and no interest financing people get from using a credit card and paying off the balance every month are not truly free. They paid for out of a tiny percentage of the dollars credit card companies profit from the poor, ignorant, or lazy people who do not pay off their cards each month, overspend, and get hit with ridiculous fees and high interest rates. This is just another reason I cannot ever condone the use of credit cards, be it a sin or not. It’s pretty close to gambling because for every 1 “winner” there have to be 19 “losers” to pay or the credit card companies would go broke. Perhaps that too is a conscience issue?
We are working our way out of the credit card abyss. My husband has several health challenges and they all hit him at once. We wiped out our savings and had to use the credit cards. He called his credit card companies and they refused to work with him. When he told them his situation they closed the accounts!
As much as we hated to do it – it was the only way we could eat and pay the docs. No one would work with us. Now we are slaves.