Before you go checking out what the aaa membership cost will run you, it might be a good idea to take a look at your whole financial picture and look where you can reduce expenses, anything from monthly bills, spending money, to making the tough sacrifices in order to free up extra money. When it comes to credit cards, if you’re not using the right way it can not only cost you money, but can hurt from building up an emergency fund and saving for your future.
First Not Checking Your Credit Report
It’s a good thing that the major credit bureaus offer a free copy of your credit report that you can pull at least once a year to verify to make sure that everything being reported is accurate. You never know who could have your info these days, whether someone takes a quick picture of your card and makes a copy to start charging up your account, or even worse, have a store get hacked where all of its customer’s info goes out. Since your interest rates are based on credit score, the better score you have, the lower the monthly payments can be.
Using the Wrong Card
There are so many cards out there it can be impossible to list them all. There are a few highlights to look out for though, which include, of course, the interest rate, if there’s an annual fee, and the rewards that are associated with making purchases on the card. While sure the interest rate is important if you carry over a balance, ensuring you don’t get robbed with interest, but rewards are more appealing as you can earn points or dollars back just by making the normal purchases that you were going to make anyways, so not taking part in this would essentially be leaving free money on the table.
Carrying Over a Balance
Speaking of carrying over a balance, probably the worst thing you can do, besides make a late payment, is to go on a charging spree and not be able to pay back the full statement balance by the due date. By then, you will begin getting charged interest, and simply making the minimum payment will do little to the balance and could take years to finally pay off, unless you can make the largest monthly payments you can afford until the balance is finally paid off.
Closing Zero Balance Accounts
No matter if you are new to debt or having been getting behind for years, when you finally reach that point where you have paid off the account can be a huge weight off your shoulders, and one that should be celebrated for that matter. You may be thinking of closing the account so you don’t risk going into debt again, but that can actually hurt your credit as it would take away from your available credit, and if there is already another balance out there, lower your credit score in the process by increasing your credit utilization.