Credit cards can be very useful in the right circumstances, but if you’re not careful they could also end up being very expensive. Here are some of the costly mistakes many people make with credit cards – are you making them, too?

Making Cash Withdrawals

Credit card cash withdrawals are becoming more and more expensive, but many people do not realise the true cost each time they make a credit card withdrawal. Once you’ve checked the charges and fees it’ll probably put you off doing this. Cash withdrawal fees, also known as ‘cash advance fees’, can be particularly steep when making credit card withdrawals abroad.

Not Knowing your Credit Card Limit

If you don’t know your credit card limit then you’re far more likely to go over it – and incur large penalties as a result. Always keep track of your credit card limit and balance and, for most credit cards, try to pay off any outstanding balance before the end of each month where possible.

Not Being Aware of the Different Types of Credit Card

There is a range of different credit card types, and you should choose according to your particular situation. For example, if you have no outstanding debt and want to use a credit card to make purchases, and are able to pay it off before the end of the promotional period, you might want to choose a 0% on purchases credit card. But if you want to reduce the interest you are paying on debts, and don’t want to make purchases, a 0% balance transfer card could be the best choice. Again, you will need to make sure you can pay off the balance before the promotional period ends.

Failing to Compare Credit Card Deals

Different providers will offer completely different terms for the same kind of credit card, so it’s wise to shop around. Credit card APRs vary wildly from place to place and, along with other costs and fees, the APR is one of the main considerations you will make when choosing a credit card. Bear in mind that there are interest free credit cards on the market which might be suitable for your needs, and that the interest incurred otherwise can be very high.

Not Considering Charges for Spending Abroad

In the rush to get ready for a fabulous holiday, credit card fees might be the last thing on your mind. But in many cases travellers can end up seriously out of pocket as a result of exorbitant fees and costs for using their credit card abroad. When you apply for any credit card, if you travel at all then this should be one of the first things you check – it could save you a lot of money.

Not Noticing Added Fees

Along with the APR, fees for cash withdrawals, fees for using the credit card abroad and a range of other added costs and expenses, some credit cards actually charge annual fees just to be in possession of them. Sometimes, these ‘premium’ cards offer certain perks, but unless you really need those perks it is normally a good idea to turn these costly credit cards down.

Author Bio: At Credit Choices you can compare different types of interest free credit cards and instant decision credit cards. Whichever sort of credit card you need, we can help you find the best deal.

Category: Finances
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