Avoid These Personal Finance Pitfalls
Missing Your Deadline
The most common timing mistake for credit card debt is simply missing your payment deadline. While certain bills give you a small grace period, credit companies usually ding you with a late charge immediately if you miss a payment. Work on your budget to ensure you pay on time, every time, to avoid late charges and hits to your credit score.
Forgetting to Close An Account
Once you pay down a credit card account in full, it can be tempting to simply forget it ever existed. But beware of forgetting to close an account that goes on to accumulate annual fees and interest.
Closing an Account Too Early
When you do pay down a debt, you may want to leave the account open (but not forgotten!) for a period of at least a few months, especially if it's a card that you've had for some time. Having a full line of credit can help boost your score, but be sure not to start spending on that account once it's paid off.
Too Many Inquiries
Monitoring your credit is important, but be careful about making too many inquiries or applying for too many special offers in a short time period as this can really hurt your credit score. Take advantage of your free credit report once a year, and space out your applications for new credit lines.
Balance Transfer Timing
Using a low interest balance transfer can be a great way to pay down debt, but keep the promotional time frame at the front of your mind in order to avoid a major interest rate hike.
Misunderstanding Introductory Rates
You must pay off the debt during the introductory period or interest charges are charged retroactively usually at a high rate.
Ignoring Interest Rate
If you have multiple credit cards, pay close attention to the interest rates and time your payments so that you don't end up paying on that high interest for years to come.
At Oklahoma Central Credit Union, our commitment is to help members save money and to provide them with the resources and tools they need to make informed financial decisions. Contact us today to find out about how to manage your credit card debts with sound financial counseling to prevent timing mistakes like these, payment calculators, and other credit tools.