During the recent postal strike, the unthinkable happened: I missed my credit card payment for the first time ever. It was a crazy month work-wise and without the paper statement sitting on the corner of my desk, I just, well… missed it.
Excuses aside, all I can say is – ouch!!
My balance was steeper than usual since I’d booked our family vacation – and so was the interest for the missed payment. I don’t even want to talk about the hit my credit rating has probably taken.
My point here is that credit cards can be useful tools – and they can also be really dangerous if you don’t handle them carefully.
Here are five really costly mistakes you can make when it comes to using your cards:
Missing a payment: Not only will you get dinged on the interest, but you could also get stuck with a penalty. And never – I mean never – miss more than one payment.
Carrying a balance: Credit card interest rates are notoriously high – pay your balance off in full every month. If necessary, use a lower interest rate line of credit to wipe the balance out.
Paying late: You could end up getting dinged by interest payments if you’re so much as a day late. Pay on time!
Not reading your statement closely: Always scan your statement carefully to make sure the charges are accurate – and that they are yours! Last month I had a restaurant charge me twice in error – I caught it and got the extra 60 bucks wiped off my bill.
Paying big fees: – Some cards charge as much as $150 or more for access to rewards or travel insurance. Ask your card company to waive any fees – they might just do it to keep your business.
Read more about the basics of credit cards. The Financial Consumer Agency of Canada also has a comparison tool to help you select a card that’s right for you.