Using your credit card isn’t a simple process, and it’s easy to make mistakes. Understanding these mistakes and avoiding them, you can keep your credit cards in good shape. Another common mistake is using your credit card to make purchases you can’t afford. Listed below are common mistakes people make while using the best free credit card in UAE.
Making only minimum payments
Making only minimum payments on credit cards can build up a large balance over time. Leaving a balance unpaid will also result in additional interest fees. These fees will eventually cost you more than you borrowed in the first place. Instead, consider setting up a debt repayment plan to help you pay off your debt.
While credit cards are convenient, they can also be dangerous if you don’t know how to use them properly. The wrong decisions can ruin your credit score and cost you money. However, using credit cards responsibly can help you build good credit and earn rewards. You can avoid most of these mistakes as long as you use self-control and know what you’re doing.
Not paying at all
To close a credit card account, you must follow the proper procedure. This will help you create a positive credit history. It is also very important to avoid making multiple credit card applications or opening new lines of credit with high-interest rates. You should also maintain a credit utilization ratio of less than 30%.
Using a credit card for purchases, you can’t afford
While credit cards can be a great way to pay off debt and build credit, they shouldn’t be used to make big-ticket purchases. While you can use them to finance big purchases, it’s best to use the cards only for purchases you can afford and only if you can pay them off in full. This will help you build good credit and get lower interest rates.
Making multiple purchases at once
Using a credit card for multiple purposes is a mistake you should avoid. While you might be able to earn more points or use different perks, you’ll also have more ways to go wrong. Keep these common mistakes in mind to avoid making costly mistakes when making multiple purchases at once.