Bad habits are easy to fall into. A one-time exception becomes part of your routine and before you know it, you’re stuck in a rut that’s next to impossible to break out of.
Bad credit habits can wreak havoc on your credit score, lead you into debt, and cause a number of other financial problems that threaten your stability and long-term goals. Consider your credit habits and if you’re doing any of these, replace it with a better habit right away.
Not reading your credit card statements
With lots of different bills coming in the mail (or email) every month, reading every single one of them can be mind-numbingly boring, not to mention time-consuming. But, there are benefits to reading your credit card statements, like catching unauthorized credit card charges or billing errors.
Don’t just check your credit card statement for your balance and payment information. Review the entire statement to verify your account activity. Report errors to your credit card issuer right away to prevent being held liable for charges you never made.
Making purchases without checking your credit limit or available credit
Don’t take for granted that your available credit is the same as the last time you checked your credit, especially if you last checked several days or weeks ago. There’s a chance you forgot about some purchases, payment wasn’t applied correctly, or that your credit limit was lowered since you last checked.
A quick phone call or tap on your smartphone app will quickly confirm that you have enough available credit for your purchase. Plus it saves you the embarrassment of having your credit card declined in the event that you don’t have enough available credit.
Pulling out your credit card instead of your debit card
Unless you’re using your credit card to rack up rewards and you pay off your credit card balance every month, you shouldn’t opt to use your credit card over your debit card. Your debit card is your direct access to the funds you should use for everyday purchases, like groceries, gas, clothing, and other expenses. If you use your credit card, it should be a conscious decision with a concrete plan for paying off what you’re charging.
Paying only the minimum
It’s so much easier to make the minimum payment than to figure if and how much extra you can afford to put towards your credit card bill. But, when you’re making only the minimum payment, you’re not making much progress toward paying off your credit card bill. And unless you have a very low balance or a 0% interest promotion, you’re probably paying much more in finance charges than you have to.
Send more than the minimum if you can or at the very least, pay the amount required to pay off your balance in 36 months, which is also printed on your billing statement. You’ll save money on interest plus you put yourself closer to having your balance completely paid off.
Habitually paying your credit card late
In an age where you can schedule your credit card payments days in advance, there’s really no excuse for habitually late payments. If you’re constantly forgetting to send your credit card payments, then you need a system to get rid of this bad habit and start paying your credit card on time.
Paying on time saves you money in late fees and higher interest rates. Plus, it protects your credit from the effects of late payment.
If you are guilty of any of these habits then you know what to do to, start making an effort to break these habits so that they don’t end up negatively impacting your credit score. Be sure to stay tuned to our blog for more informative updates such as this. What habits are you breaking today to get you one step closer to achieving the credit score you desire?