Six things you should never do when you have a credit card

Six things you should never do when you have a credit card

Credit cards can be hugely useful but when not used wisely can be a disaster.

Here are six things you should never do to optimize your spending:

1. Never miss a payment. Not only do you have to pay interest on spending when you miss a payment, but you are also likely to incur penalties and charges. These, added on top of interest payments, can make your credit card suddenly very expensive.

2. Never only make the minimum monthly payment. Every month, you will be given the option to pay your balance off in full or to just make a small minimum monthly repayment. If you take the latter option, the rest of the balance will accrue interest which is added to your overall debt. 

3. Never use your credit card as an ATM. When you use your card to withdraw cash from an ATM, you are given what is called a cash advance. The interest on cash advances is often sky-high, and you may also have service charges to pay.

4. Never give out credit card details over text message. Few companies will ask for your card details via email or text message. To prevent fraud, only ever give credit card details on authorized websites.

5. Never lend your card to someone else. It might seem like the nice thing to do to lend your credit card to a friend or family member in need, but this is also one of the easiest ways for your credit card to get lost or stolen.

6. Never forget to read the terms and conditions. When you make a credit card application, there are always terms and conditions to read. These relate to fees, charges, interest rates and other things you might need to know, so take the time to read them.

What other things did I forget?  What else should you avoid?

My name is Mark Seed - the founder, editor and owner of My Own Advisor. As my own DIY financial advisor, I'm looking to start semi-retirement soon, sooner than most. Find out how, what I did, and what you can learn to tailor your own financial independence path. Join the newsletter read by thousands each day, always FREE.

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