TEN Common Mistakes Made By Credit Card Holders

With credit card companies vying with each other for our custom, it is easy to acquire credit cards without much thought to the consequences. Here are TEN common mistakes made by credit card holders:

#1. Applying for too many credit cards - For a better financial future, it is best to stick to a maximum of FOUR credit cards. Anything more than that and you are inviting repayment problems and worse still poor credit rating. Jumping at any chance to apply for a new card as soon as it is offered is not a good idea.

#2. Maxing out credit card - Another common mistake is using the credit card to its maximum limit. This can reduce your credit score as lenders see this as a sign that you are living beyond your means. This can make it difficult for you to borrow in the future. You may need some credit counselling if you are having problems with managing your debt.

#3. Applying for a card and limit you cannot afford to repay - Most people have bad debt management skills and are swept away with the fact that they have 'x' amount of pounds as their limit. Rarely do they consider paying the balance and thus run up the card to its maximum in a few months. This means you may end up spending years trying to repay the card.

#4. Making use of the cash advance function - Using credit card for purchases of goods and services guarantees at least 30 days interest free credit, but with a cash advance we start to pay interest from the moment you acquire the cash. Using your credit card to cover your day-to-day cash needs is a very costly mistake

#5. Ignoring your statement - A common error when we start to feel the pressure of a debt burden is to start to ignore the fact that the debt exists in the first place. If this happens, the chances are the fees and charges will start to accrue and the next thing you know you are not making the minimum repayments. Suddenly you are the subject of more fees and charges. And so the cycle goes on!

#6. Making Late payments - Late payments subject you to extortionate interest rates and late fees charges even if you've got a low APR credit card. This is very profitable for the credit card company and a very unfortunate mistake for you to be making.

#7. Paying only the minimum amount - Credit card companies love us and it has to be their favorite of the common credit card mistakes, but with credit card interest rates as high as they are, if you are only making the minimum monthly repayment then you should know it'll take you years to repay the debt and you'll have repaid the debt many times over in interest payments.

#8. Not reading the small print of the credit card agreement - In your haste to get a credit card you have not read the terms and conditions of the agreement and so you are not aware that if you act in a certain way or do something you should not, then you are likely to be paying for it. But the real reason why this is on of the common credit card mistakes that issuers love to see is because if you don't read the agreement carefully they can charge you for additionals you may have been able to opt out of - such as credit card insurance (a big earner for card issuers!).

#9. Adding a secondary user - Although some may not consider this a mistake, if you add a secondary user to your credit card account you've suddenly lost control over the spending on your card - no matter who the person is. Now bills can rack up on your account without your normal controlling self, as they are being transacted by a third party.

#10. Using your card overseas - For every overseas purchase you make you could be subject to fee and a lousy exchange rate. So, even if you are the perfect credit card customer and pay your bill in full and on time, the card issuer is making money out of you