5 Habits You Should Steer Clear from when Using Secured Credit Cards

5 Habits You Should Steer Clear from when Using Secured Credit Cards

Today, let’s talk about things young consumers, like you, must avoid when handling secured credit cards.

Skipping on your monthly bills.

Always remember that payment delinquency – that is, missing out or defaulting on your credit card bills on purpose – comes with a stiff price. Not only will you get penalized with late payment fees and surcharges. Such habit can also take a toll on your credit history and ruin your working relationship with your card issuer.

This means that if you wish to avoid these things, you have to stick to your due dates.

Make sure that you pay your credit card bills on or before the agreed-upon payment date. And if you find it difficult to do so, then we suggest that you use simple tools like personal reminders or special arrangements like automatic payment to ensure that you can settle your financial obligations prudently.

Making incomplete payments.

Another thing that can cost you a great deal of money is paying just the minimum amount required by your card issuer. After all, such habit can cause your interest charges to balloon out and get way out of hand.

So, if you wish to keep your credit and interest payments at a minimum, we suggest that you avoid carrying balance from one month to the next. Instead, you should try to make, not just on-time, but also complete payments, each month.

Maxing out your secured credit cards.

Keep in mind that spending beyond your credit limit can be disastrous not only to your personal ďŹ nances but also to your credit history. This is because maxing out your cards can get you penalized with huge overdraft charges as well as with declined transaction fees. Moreover, it can cause your debt-to-limit ratio to rise and cause your credit score to drop.

Hence, if you wish not to incur pesky fees and charges and to maintain a good credit standing then, you should resolve to use just 25 to 30 per cent of the credit limit set on your secured lines of credit.

Throwing away receipts and financial records.

We discourage you from throwing away proofs of purchase, receipts, and small financial records. After all, you’ll never know when you might need such documents for validating entries in your billing statements and for disputing errors in your annual credit report.

Always remember that the immediate resolution of a credit dispute would largely depend on the documents you can submit to your card issuer or to the three major credit bureaus. So just to be safe, make it a habit to save all the financial records you will receive and keep them with all your important papers.

Forgetting to order the latest copies of your annual credit report.

Keep in mind that close examination of your credit report is your first line of defense against credit fraud and identity theft. So, if you won’t find time to order and review the transactions on your report, you will soon be at great risk of being held liable for purchases you never made.

This means that you shouldn’t forget to obtain the latest copies of your credit files.

Moreover, you should always find time to scrutinize the items listed on the documents you will receive so that you can immediately catch errors which might compromise your excellent credit standing.