Credit cards are really helpful because they work on the principle of buy now and pay later. They provide instant access to your finances apart from a host of other benefits such as reward points, cashback and so on. But to make the most of credit cards and use them in the most fruitful way, you need to avoid some common credit card mistakes that are discussed herein.

Withdrawing Cash with the Credit Cards
This is one of the common mistakes holders of credit cards often commit. This is because withdrawing cash with a credit card calls for an advance fee of up to 3.5%, which can go as high as 49%. The charges are applied right at the time of withdrawal and they keep accumulating till the date of repayment. This is a mistake because it is like burning a hole in your pocket, especially when you don’t repay for a long time.

Always Paying the Minimum Amount Due
Many people have a tendency to pay just the minimum amount due and not the full amount that comes with their credit card repayment bill. Now, this might temporarily seem to be financially relieving. But repeatedly paying only the minimum amount suggests that the full amount keeps increasing, leading to a hefty amount. Also, the outstanding credit card bill amount that you avoid paying will accrue interest in the form of financial charges. This is why paying the minimum amount due is one of the common credit card mistakes. You can do so once or twice, but you should always try to clear the repayment completely, to avoid falling into a debt trap.

Maintaining Over 30% of Credit Utilization Ratio
Maintaining a credit utilization ratio of over 30% implies a sort of credit hungriness. This also leads to the credit bureaus reducing your credit score by a few points. Hence, you should always try to contain your credit card spends within 30% of the total credit limit. If maintaining it below 30% is becoming a problem for you, request your bank or credit card issuer to increase the total credit card limit.

Not Redeeming Reward Points Before Expiry
Yet another of the very common credit card mistakes, failing to redeem reward points before the expiry period should be avoided. This will mean that you are not taking full advantage of the credit card issued to you. The period to redeem usually ranges between 2 and 3 years, and after this, you cannot redeem it. So, do keep a tab on this expiry date and go through the terms and conditions of your card’s reward points programs regularly. Also, some credit card issuers mention the number of reward points, about to expire soon in their monthly bill statements, which you should also check.

You need to stay aware and avoid these common credit card mistakes to put your finances and savings in the right direction.