These days, credit cards are more of a necessity considering that they are convenient, secure, offer generous reward systems, and help build a healthy credit score. They also have a fair share of downsides, especially when you do not use them well. In this article, I will be talking about credit cards. And this does not have anything to do with what I have learned in books. I will be sharing some of my lessons from credit use.
With that said, I intend to share some credit card mistakes that I have made over the last 12 years. As you might have expected, I made most mistakes when I was still young. I could have avoided them had I gotten some counsel in the past. That said, here are some mistakes I made while using credit cards.
Maxing My Credit Score
During my early days, I can say that credit card companies were quite generous with me. I was lucky enough to land a job at Boeing as a technician, which also made me a ‘darling’ of credit card companies. Looking at what I could spend, I was always tempted to go max on my credit limit occasionally; after all, I was young and could repay what was owed.
Maxing my credit had its fair share of repercussions. For instance, I sacrificed some points in the process, and loans could take longer to be approved. Moreover, there are times when I had emergencies only to realize that I had hit my credit limit. It took me some time before I understood why I had to go slow on my credit cards. In the process, I had to stay away from things like cashback benefits, card rewards, and travel points, which I realized did not add any value.
Having Too Many Credit Cards
I was always tempted to have as many credit cards as I could. While I might not have a good reason for this, I would say that advances from credit card reps were too compelling for me at that point. And I do not think that this has changed. I see many people continually add too much plastic under their name.
Having several credit cards was not good for me. I was not afraid to spend, and I had to live with the consequences. I then resorted to keeping two cards, which made it a lot easy for me to monitor my spending. It also meant that I did not have to worry much about my annual card fees.
There are times when I was forced to carry a balance to the next month after pilling up debts. Looking at my financial records, I realized that the annual rates kept increasing, and at times, I had to pay some late fees on top of the interest.
My spending problems often put me in some trouble. To date, I prefer remaining conservative while using credit cards. This means that I only spend when necessary, but I also pay my debts in full. If I cannot make my credit card payments on time, I have to inform the card issuer and make a temporary arrangement.
Not Looking at My Billing Statements
Working in a busy environment, I rarely had the time to keep evaluating my financial health. And this meant that I would not pay attention to my billing statements unless I felt that my bills were getting out of hand. I did not worry much about paying my bills, considering that credit card companies gave me assurances that they were 100% secure.
I can say that as far as credit card fraud is concerned, I was lucky not to fall victim. However, over the years, I have noticed that credit card frauds have become rampant. And fraud victims are usually not aware of the happenings unless they keep a close eye on the billing statements. Being the person I am today, I have to go through all my credit card payments as soon as they hit my mailbox.
I am alive to the fact that credit cards are indispensable in modern life. Again, we all dream to live a debt-free life, which is undoubtedly difficult. Not that credit cards are a part of our lives, we must demonstrate immense discipline and frugality to avoid living beyond our means.