It might be safe to say that everyone who has ever used a credit card has also misused a credit card. What is unfortunate, though, is that many people make mistakes without even realizing they’re doing so. Sure, you know that charging a $3,000 vacation when you make minimum wage isn’t a great idea, but what about the hidden mistakes? Here are some hidden fees and mistakes to keep a look out for to help avoid putting yourself in credit card debt. If you do find yourself in credit card debt, pursue help from a debt consolidation company like CreditGuard.
- Transferring a Big Balance: Moving your balance from a high interest card to a low one makes good sense, but only if you are careful. Many companies hide some fateful rules in the fine print, so make sure you read the terms of the transfer carefully before going through with it. Know when your introductory period ends and how much you’ll need to pay until then to make a dent in your balance. Know where the APR is headed when that period is over. If there is a transfer fee, find out what it is and determine whether or not the transfer still makes sense.
- The Minimum Payment Cycle: Because they always make the minimum payment, many families never consider seeking out a credit card relief program. To them, minimum payments are sufficient. But while it’s much better to make that minimum payment than to miss it, it will take a long time to eliminate your debt in this fashion. Credit counselors can help you do the math and see just how long that would be. In many cases, it’s a matter of decades, not years. With a good debt consolidation program or at least a commitment to pay more than the minimum, you can pay down you credit card debt in a fraction of the time.
- Cash Advances: Since some things can only be paid in cash, customers sometimes turn to their credit card company’s cash advance program. But this can often be a mistake. Unless your back is really up against the wall, avoid this approach. The average cash advance terms are fitted with extraordinarily high interest rates, many of which start piling up the moment you have the cash in hand. Explore your alternatives thoroughly before you look into a cash advance.
With the right credit management techniques in place and the knowledge of which practices to avoid, you can more effectively avoid the accumulation of unnecessary credit card debt. So keep these recommendations in mind as you make your financial decisions.