A credit card can be an excellent financial tool. It is possible to build credit and earn rewards if you use them in a sensible manner. Problems start when you engage in bad habits involving your credit cards. The most common among the bad habits is the habit of mindless charging. At first, charging everything to the credit card seems an excellent idea. However, it comes with a clause of doing everything in a responsible manner. You should charge only those things that you can afford and is aware of credit utilization ratio. There is also the need to make payments before the due date. Problems occur only when you accumulate a large quantity of debt at end of month.
Break the habit and forgetting payments
It is important for you to break the habit. Make a budget and cling to it. Following this method allows you to get a better idea of funds. You will have to use such funds when the statement lands in your inbox. It means that if you reach the dining out expense border, you stay at home and cook something for yourself.
It is surprising but true, many people simply forget to make the payment. If you forget, then get ready to pay interest fees on monies owed. A late fee will also be foisted on you. To give an example, if you are burdened with a late fee of $35 every time you pay late, you are actually paying in excess of $100 every year on fees for simply not doing payments on time. You may also have to pay more interest charges. Do not forget that missed payments also damage your credit score. In case you have this particular problem, set up an automatic payment system. Another simple trick is to set up reminders on your phone.
Paying more than minimum
Many people only pay the minimum. However, always pay much more than the minimum. This will help you to avoid racking up large interest fees on top of the spending amount. There are times, however, when a number of expenses add up and it is impossible for you to pay the full card amount. To break this habit, set goals and work towards them. You should make it a priority to pay statements on time. It is vital that you pay the minimum amount. It is a wise decision to avoid extra charges to your card when you pay off your debt.