Credit Cards- 4 Massive Mistakes That Affect your Finances!

When it comes to making purchases of products and services, a credit card is really convenient. Having one facilitates the resolution of various crises as well as the automated payment of bills. However, if it is regarded as supplementary revenue and is spent without regard for the consequences, it can become a problem.

When cash is not accessible, one of the most significant advantages of credit cards is their ability to be used immediately. This is incredibly useful in emergency situations or when you need to purchase something but don't have the necessary funds on hand.

However, it is a double-edged sword , especially when indiscriminate use is made to access certain tastes, which could later affect your personal finances, as they cannot be paid in a timely manner.

There are four major mistakes you make while using your credit card!

Using a credit card may provide you with several advantages, including the ability to make online purchases with more security, earning rewards, and demonstrating to lenders that you are capable of receiving additional loans. Credit cards, on the other hand, can come back to haunt you and put your financial situation in peril if you make the following blunders.

1. You Pay Late!

When it comes to determining your credit score, your payment history is the most significant component to consider. A single late credit card payment may cause your credit score to drop by as much as 100 points or more.

When you need new credit cards or loans, this might make it more difficult to obtain them. It's also possible that you'll be charged late fees.

2. The Minimum Payment Increases!

If you have credit card debt, this is the very worst thing you can do because it will accomplish virtually nothing to bring your amount down. Furthermore, according to The Motley Fool, if you continue to use the card, the minimum payment will grow, resulting in you squandering more and more money over the course of time.

3. Abruptly Cancel Cards!

If you have a feeling that you have too many credit cards and are tempted to cancel them all, you might want to reconsider. It's important to remember that cancelling credit cards might have an impact on your credit utilisation, which is a measure of how much of your available credit you're currently using, according to MSN.

As a result, when you cancel credit cards, you end up with less credit accessible to you and your credit usage increases, both of which can have a negative impact on your credit ratings. Taking this into consideration, it is recommended to exercise self-control and begin using a single credit card while leaving the others in place.

4. You apply for a new credit card far too frequently!

The issuing bank will do a comprehensive examination of your credit report if you apply for a new credit card, which will result in a deduction of points from your overall credit score.

Also, keep in mind that by the time banks do a lot of deep inquiries into your credit report, it's telling lenders that you're looking for new lines of credit probably because you can no longer finance your lifestyle.

In other words, they may infer that you have an excessive number of costs, which may lead them to question your capacity to pay them.

Pros and Cons of Having a Credit Card!


  • Credit cards are accepted by the vast majority of places, regardless of the form of money. In the case of cash, if you are travelling outside of the country, you will need to exchange your money for the local currency.
  • Everything you purchase with your credit card will be immediately recorded in your account statement as a transaction. If you pay with cash, you must be incredibly organised and meticulously record all of your spending in order to maintain track as meticulously as you would with credit cards on statements.
  • Benefits of Card Use: The more you use your card and adhere to your payment obligations, the more points or free merchandise you can earn. However, in order to get the benefits of this programme, you must make regular payments and utilise your card wisely.
  • A contingency or insurance plan is built into the cards in the event of theft or loss, and this plan restores the lost or stolen credit. Instead, it is the loss or theft of cash that can have a direct impact on your financial situation.
  • The capacity to withstand the test of time is highly dependent on how well people are organised. However, in general, when you have cash on hand, it is typically simpler to spend it quickly. It is for this reason that money obtained through credit or debit cards is supposed to last longer.


  • Abuse of credit cards: The most common issue that consumers encounter is the misuse of credit cards. They are utilised to purchase non-durable products or to provide themselves with a lifestyle that they cannot otherwise afford (brand shoes, brand clothes, perfumes, etc.). Making weekly payments to places like the family pantry with a credit card is an obvious example of credit card abuse. It is preferable if the gift cards are utilised to purchase something that you wouldn't ordinarily be able to afford, but that will save you money in the long term.
  • Disorganization: Because credit cards are so convenient to use and are accepted practically everywhere, even if you have all of your records, you may find it difficult to coordinate timely card payments, and you may find yourself in debt much more quickly than if you used cash.
  • You don't have enough money: After all is said and done, you're spending money that you don't have. You are making a pledge to pay in the future when you sign this document. How can you be certain that you will be able to pay if you still do not have the funds available to you?
  • Credit card maintenance includes paying fees and commissions simply for the privilege of owning a credit card. You now have yet more channel for your money.
  • Inability to obtain a credit card: Not everyone is eligible for a credit card, either because their income is insufficient or because they do not have a strong credit history.


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