A lot of people today have or will have credit cards since not having one may seem to be unthinkable in view of the things that everyone of us need to pay to sustain our day to day living.  Without having a credit card could also show a negative point to our credit score despite the fact that they have not had one all their life. 

Getting a credit card for the first time or before now have a credit card for some time now but is not knowledgeable of how they use it, you may want to look at a few of the things you need to know about plastic money to save you the inconvenience or rectify any mistakes connected with credit cards.

Being late on paying your bill

Credit card bills paid on time is a big plus for you and your credit score.  In case you are unable to compensate it on schedule, however, you could ask your bank to give you some form of consideration and chances are they may hold out your dues or even relinquish any fees.  Late payments of credit card bills that occur on a usual basis does not only hurt your credit score, it will also make you pay heavier penalties and interest rates.

Missing on your payments

Just like delayed payments, more interest fees and penalties are added to your tab.  If you would like a good record on your credit score, you should prioritize paying your credit card as stated in you agreement.  Consequencesof a missed or late credit card monthly payment include a “late fee” charge of about $15-$35.  Creditors will also inform credit bureaus of  your late payments and if you don’t improve this pattern it will greatly affect your credit history.  Furthermore, your interest rate is increased to the default rate which is the maximum interest rate your creditor is permitted to charge you with. 

On time payment is one of the most significant things you can do for someone holding a credit card because 35% of your credit score is based on payments being made on time. 

Making repeated cash advances

A cash advance should, as much as possible, only be used for emergencies or if you can immediately pay for it.  The reason for this is because as soon as you withdraw the cash from the machine, interest for that money will start to pile-up and there is usually no grace period for it. If you have an urgent situation such as getting your loved one to a hospital, you could first ask if they could charge it to your credit card rather than paying them cash that came from a cash advance with the same credit card.  The reason for this is because a cash advance will probably require you to pay a higher interest rate than a charge on your card.

Charging only for rewards

If you are someone who is eager to buy things with your credit card just to earn points, think of the broader picture and how it could mess with your finances.  If you pay your credit card bills on time, then doing it might be even at your advantage.  Still, if you don’t have a good track record with your payment, you should avoid this as much as possible and focus on straightening out your obligations.

Maxing out

Reaching and going over the balance limit on your credit card can also affect your credit score.  Also known as maxing out, this routine could also give creditors the notion that you are not responsible enough to manage your finances and may affect your future credit or loan requests.  Maxing out is part of the Credit Utilization criteria which makes up 30% of the overall credit score.