Break free from these 8 bad credit card habits

Break free from these 8 bad credit card habits

You can pay later for goods and services using a credit card, which is one of the main reasons everybody wants one. Moreover, converting high-volume payments into short-term loans that accrue monthly interest is possible. But it would help if you were mindful of its use, as questionable card practices can push you further into debt. Here are the eight bad habits you should break while using a credit card.

Not paying the total amount
Delaying the full payment only adds to more spending on the accrued interest. It also affects your credit score and can potentially damage your credit history for any future loans.

Making late payments
Another bad credit card habit is paying past the due date, as the bank will levy penalties and extra fees. The rate of interest on future payments also increases.

Overspending through installments
Banks charge a nominal interest for every installment, so the bill does not seem like much when you first look at it. But multiple loans can add up due to overspending on installments and severely pressure your planned finances.

Not using your card regularly
Not using your credit card is a habit as bad as using it too often. Unused credit cards score low in the credit rating system, so banks or credit unions may cancel such cards due to inactivity.

Using credit cards over debit cards
Credit cards should be reserved for major purchases only. Debit cards are a better choice for daily groceries since you can access the funds directly. Using credit for every expenditure means extra payments in interest on these purchases; using a debit card can avoid such charges.

Applying for multiple cards
Having many credit cards can be very tempting to use frequently. The low-interest offers on these cards can force you to rack up massive debt. It is better to use just one.

Taking out a cash advance
Don’t use a cash advance against your credit card if you need emergency funds. Banks and credit unions charge exorbitant interest rates on such advances. There are better alternatives.

Making multiple balance transfers
Balance transfers allow you to roll your high-interest debt to a low-interest credit card. But making regular use of this facility will cost a lot of transfer fees even if the interest rate is lower. It also affects the cycle of payments and could result in delays that result in more interest-burdened debt.

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