Credit cards are a gleaming, double edged sword, waiting to be unsheathed and sent into the fray, armed with a burgeoning credit limit and accumulating debt.
Those of you who respect your slips of magic plastic understand they require constant care and attention, implementing a steady payment plan and factoring any large, unexpected purchases into interest patterns, anticipating the unexpected and coming up above even.
Sadly, there are those who fall into the slippery hole of debt, drowning in superfluous purchases of items beyond their means – we’ve all been there at some point, taken a bite out of the pie without swallowing and paying for it later, plus a little extra as a consequence.
It’s natural for banks to approach you, waving new temptations under your nose and promising elevated credit limits – if you’re already struggling, what makes you think another card is the answer to your difficulties? Tell us, does this sound like you…
Your Wallet is Full of Plastic
You live by the credo the more, the merrier, signing up for credit left and right, consolidating cards here and closing out accounts there to be no farther afield in the end.
There’s something about a fresh letter from your chosen bank, offering you an already approved credit application, pre-filled and ready to go – you can’t say no. Not that you try seriously.
Sure, you might question if you really need another card (after all, you already dodge the repayment schedules from your existing favourites and pay when you can), but the instant gratification factor seduces you into signing the dotted line. More is not better and debt consolidation specialists like Fox Symes agree – if you don’t know when to stop now, you don’t need to start again.
Not Doing Your Homework
The interest rate is magnificent, the introductory scale truly spine-tingling and you can’t wait to roll over your two minimal cards into one, creating a stream lined payment process.
Lower interest rate, with an incentive like that, who can blame you? Nobody. But a closer look at the facts and fine print will reveal a few undesirable caveats – introductory rates are introductory, as in for a limited time only.
This rate will then revert to a premium you may not be able to afford, completely sinking your vision for a savings plan. The small print down the bottom is the bane of many credit card connoisseurs; before signing up, read closely, understand down to the last bullet point and ask a lot of questions based on what you’ve read.
A credit card is not a right, but a privilege and an incredible responsibility that can affect your credit rating!
Repaying the Minimum
You’re meeting your minimum repayment obligations. Yay. Let’s go shopping or out to dinner and blow all the cash you just paid back on something you don’t really need, right? Not really.
Endorsing the wasteful spending of money will never be this articles aim; instead, paying only the smallest amount possible every month ensures the banking institution is making the most off you it can, as you’re essentially paying off your interest.
That’s right, debt isn’t going down, but it isn’t raising the roof either. You’re stagnant. In a holding pattern. This method of repayment is a life sentence of paying the same debt over and over, through interest before you even break through to the solid amount.
If any of these scenarios sound familiar, the Fox Symes Blog has a few pages on how to get your plastic addiction under control. What about you, do you have any tips for rookie credit card holders out there? Let us know in the comments.
Have you ever dealt with these rookie credit card mistakes?
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