9 Year Mortgage Shares The 6 Biggest Credit Card Mistakes you Should Avoid
There’s a good chance that most of us have made at least one of these credit card no-no’s but, Nine Year Mortgage advises that you avoid making any of these mistakes in order to protect your credit score.
1. Paying your bill late. It’s not an uncommon occurrence. The bill comes in the mail, and gets lost under a stack of papers. When you actually come across it again, it’s past due. Getting in the habit of paying bills late can wreak havoc on your credit score. Nine Year Mortgage suggests having payments automatically come out of your account each month, so you won’t have to worry about staying on top of it. Timeliness of your credit card payment is 35 percent of your credit score, so it’s important to make sure it’s paid on time each month.
2. Paying only the minimum. While it’s tempting to keep more money in your pocket by paying only the minimum payment, you aren’t doing yourself any favors in the long run. By paying only the minimum payment, you could end up paying for 20 years on a few thousand dollar balance. Nine Year Mortgage warns that you could end up paying double for a meal or shoes that you purchase if your interest rate is over 15-16 percent, and you are only paying the minimum.
3. Co-signing on a credit card. Nine Year Mortgage understands that you may think you are doing your child a favor by co-signing on their first credit card, but if they spend irresponsibly or make late payments, those mistakes could affect your credit. Before co-signing, be sure you have a conversation with your son or daughter and let them know how credit cards work. You may also want to consider getting a secured credit card or a pre-paid debit card instead.
It isn’t always parents co-signing for children. In some cases adult children are co-signing for their own parents. Co-signing for anyone can be dangerous. The reputation of that person can reflect poorly on you, and if they don’t pay their bills, creditors will be coming to you for money next.
4. Regular balance transfers. Nine Year Mortgage knows that a balance transfer to a lower rate can save you money on interest. However, if you are transferring your balance because you can’t afford it, that isn’t a good sign. You aren’t getting yourself anywhere, and there is a good chance you are in financial trouble if you are using one card to pay another. Don’t let yourself get caught in this endless circle.
5. Too many cards. Nine Year Mortgage understands that it’s tempting to apply for store cards when discounts are available, or for credit cards with a great rewards program. However, applying for too many cards around the same time can harm your credit.
6. Cancelling cards. After reading this article you may have decided you want nothing to do with credit cards. However, Nine Year Mortgage cautions that this could hurt your credit. Even if the cards are paid off, it’s important to keep them open (unless the temptation to spend is too strong). Part of your credit score is how long you’ve had credit, and if you cancel a card you’ve had for several years, that could really hurt you.
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