When I wanted to buy a house a year ago, I finally started by carefully checking my credit score. An alarming report told me that a factor that brought down my score was a “lack of miscellaneous credit” and “no store or gas credit cards” in my file. And I thought minimizing my debt liability was a good thing.
To try and solve the problem, I decided to delve deeper into the world of credit cards. I thought I was responsible enough to add a number of cards to my portfolio without negative consequences. I ended up on a slippery slope of problems. Although I was particularly tax wise, I was the victim of some stupid mistakes. And because of stupid mistakes, I don’t mean that I have to spend more than I have earned or ignored credit card invoices. I mean stupid, avoidable bank errors that ultimately harmed my wallet and my credit score.
Beware of these stupid credit mistakes and confessions, so that you can avoid the problems my friends and I were confronted with.
Confessions # 1: My Deep, Dark Secret
I had never opened a credit card in the store and I thought I missed out on the big discount offers from cardholders. But it turned out that I also missed the “miscellaneous credit” that I needed to increase my score. When I opened my Kohl’s credit card, I immediately started taking advantage of the 10-30% discount offers. The credit score benefit did not come that fast. At first I lost about five points because I had assumed more credit liability, but after a few months without debt my score went up. I was even on AOL’s WalletPop for unknown steps to improve your credit score.
What is my deep, dark secret? After having had the card for about six months and seeing my score rise when I paid to the register or immediately after being charged, I made a mistake. I forgot a reimbursement and missed a payment – with more than thirty days.
Learn from mistakes : there is a reason that you lose points on your credit score when you open a new account. Lenders know that people probably forget Macbethijk to add a new payment to their invoice payment schedule (or their budget). Don’t fall into their trap. When you are approved for a new card, immediately set new reminders to add this invoice to your routine. Mark your calendar before the due date of your first payment. Or note one of your old regular monthly invoices that indicates that you need to check the new account.
Confession # 2: Note who is behind the curtain
The credit card payment for my deceased Kohl had far-reaching consequences – as stupid mistakes often do. Because the Kohl card is issued by Chase Bank and Chase also has two of my other major credit cards, they punished me with the standard percentage on both cards. At that time, one of my Chase cards had a balance, so this error cost me hundreds of dollars in financial costs.
Learn from mistakes : always make your payments on time, of course, but your responsibility does not end there. You also need to keep track of who issues your credit cards so that you know how late payment can affect other cards. Even after the Credit CARD Act of 2009, a form of universal standard still applies to credit cards issued by the same bank. If you immediately discover your mistake and you know which banks are to blame, you can call the credit card companies and negotiate a lower rate on at least one of the cards before you have as much debt as I do.
Confessions # 3: being a data puppet
I am not the only one with an expensive – and admittedly stupid – late payment. Ellen Porter, public relations executive, confesses to the ‘stupid credit movement’ that triggered her credit score and left her without major credit cards.
She entered her bank account number incorrectly when she started making an oMacbethine payment. Because the attempted payment was canceled, it became a late payment. The following month, she remembers, “I had to take a day off from work and use that credit card to pay for a plane flight because of a death in my family. That sent me over the top, financially, and I missed another payment. I had to close the card and agree to a payment plan. “
The first error, a simple problem with data entry, resulted in fees, interest and a fall in the credit score – challenging issues, but errors that Porter could have corrected. The poor timing of major problems the following month aggravated the problem and made it an obstacle that it could not overcome.
Learn from mistakes : check your numbers (even threefold) when you sign up for oMacbethine payments. Check your account a day or two after your scheduled payment to make sure it has been processed successfully. If you sign up for automatic invoice payment, you must take the processing time into account. Ask a customer service representative if you are not sure when the company will withdraw the payment from your account. Even if you are familiar with oMacbethine data forms, never trust your first pass through a new system. And do not trust the auto-fill options of your browser. The small errors that result from rushing will cause major problems on your credit report.
Confession # 4: Too much faith
I once tried to open a credit card at another store, again to diversify my credit, and perhaps more importantly, to get a big discount on some gifts. I filled in the application, which immediately gave me a 30% discount. I also paid with a number of gift vouchers and when the cashier told me that my final balance was due, she said it was too low to qualify for the new cardholder discount. Because of the small print and the minimal costs I could not get the discount, but that was nothing compared to what happened afterwards.
I paid in cash instead and asked her to cancel my request. I should have taken the form home and shred it myself. The cashier took my money and instead of canceling my credit card request, the store accidentally opened an account and put the amount on my new card. I would have dealt with the double charge, but I never received a bill. I received a phone call, six months later, telling me that my “neglected” account had failed. I learned during the call that they not only opened the card (I was approved!), But they entered my address incorrectly, so I never received an invoice. It took hours on the phone and appealed to the credit bureau to repair the damage.
Learn from mistakes : the example can be extreme, but such a mess can happen to you. Please note that as soon as you sign the application, you assume a certain degree of responsibility. You may be accepted or rejected. You might be planning to take the discount and cut up the card, or you would expect to charge hundreds of dollars a month. Anyway, once you have registered, you must continue. Do not assume that no news is good news. No news can be very bad news. Save your copy of the application and credit card policies and if you don’t receive an invoice or other email within a few weeks, call the card issuer to find out your status.
Confessions # 5: Small-business screw-ups
You know you should only use your credit card if you know you have the money to cover your debt. But especially if you have a business, a credit card blunder sometimes starts with reasonable intentions, such as billing a purchase, because you expect money to come in that month. When Anthony Green, an entrepreneur and president of the small company website Take Care of Biz, made his stupid mistake, he learned that you can’t trust that money.
He says: “The stupidest thing you can do with your credit is to use your credit card or take out a loan without a guaranteed way to pay it back. This summer one of my companies was expecting a payout of $ 90,000 by the end of the fall , so we took out a $ 40,000 loan to build infrastructure. The contract ended unexpectedly and in the end we had a hard time driving until we made a number of major changes. “
A move like this can have enormous consequences for a company, but a negative cash flow is of course during rapid growth phases of companies. For an individual, spending money before it comes can very quickly find a deep hole in the debt.
Learn from mistakes : make sure your persooMacbrich-rich cards have the money to cover the costs you incur. This is a great way to collect credit card rewards and keep your credit score high while maintaining your financial stability and peace of mind.
For a small business, if you don’t have the luxury of liquidity, consider the risk of making a purchase on credit. Do you have to spend immediately, or can you afford to wait for a new purchase until after your big sale? Remember that you cannot always trust your customers and debtors to pay you on time. And your lenders won’t care if someone else owes you money.
The use of credit always entails risks. For example, credit card companies rely on customers missing a payment for those 0% interest offers within the first year. But by paying close attention to due dates (especially new cards), using automatic payment options for invoices (and double-checking your data before you process the transaction) and never spending more money than you have available at the bank, You up credit card rewards points and enjoy all the other benefits and convenience of credit cards. You also benefit from a good credit score, which means you get better rates for car loans, mortgages and even car insurance.
Which credit card confessions do you have? Don’t worry about admitting stupid mistakes. We won’t smile – we’ve all been there.
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