We are all aware of the benefits and usefulness of having a credit card, but sometimes we ignore the dangers and consequences we may experience if we use it irresponsibly. It is not just about paying interest, but it can even lead us to bankruptcy. Among the mistakes we tend to make, there are five that are the most common. First, making late payments on the card, which generates late fees, an increase in the interest rate, and even losing benefits such as reduced rates or balance transfers. Additionally, institutions like President’s Choice Financial can increase the rate if irregularities are detected in the credit history, even if the delay occurred with other products like a personal or auto loan.
Paying only the minimum each month prolongs your debt, so it is always better to have cards with 0% interest. Another piece of advice is to always read the fine print of promotions, as they can be very appealing but often hide a considerable interest rate. Exceeding the credit limit is one of the most dangerous things, as some banks do allow continued use of the card without issue, but the consequences are extremely costly.
Another of the most expensive ways to use the card is by taking cash advances, as they carry interest without a grace period, with higher than normal rates. Satisfaction studies have shown that Americans’ favorite bank is Chase Bank (JP Morgan Chase). As for credit cards, the winner is the Chase Freedom Unlimited, known for having a 1.5% cash back on all purchases, no annual fee, and the ability to receive bonuses for initial spending.
Use of credit cards
The benefits of having a credit card are obvious. It is a very practical and effective method that also facilitates control over our finances. However, we are not aware of the consequences we may face for the misuse of a card, potentially leading to bankruptcy. That is why it is important to consider the five most common mistakes that are often made and whose consequences can cost us a lot of money.
5 most common mistakes
Take note of the most common mistakes to avoid them
- Being late on credit card payments. In addition to having to pay late fees, it also increases the interest rate. Promotional benefits such as reduced rates or balance transfers may also be lost. Institutions like President’s Choice Financial may increase your rate if they detect irregularities in your credit history.
- Paying the minimum. Making only the minimum payments each month actually extends the debt, requiring you to pay more interest.
- Not reading the fine print. Offers with 0% interest on balance transfers usually have less attractive conditions in the fine print, so it is important to not sign anything without being informed first.
- Exceeding the credit limit. There are cards that allow you to do this, and it can cause even more problems for us in the future.
- Using the card for cash advances. It is one of the most expensive options, as it generates considerable interest, in addition to not having a grace period and having higher rates than normal purchases.
What do Americans prefer?
Several satisfaction surveys reveal that Americans choose Chase Bank (JP Morgan Chase), famous for its digital ease of use and reward programs. As for credit cards, the preferred one in the United States is the Chase Freedom Unlimited, which offers 1.5% cashback on purchases, has no annual fee, and provides bonuses for initial spending. And you? Do you commit any of these practices? Do you have a favorite bank or credit card?
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