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Nickeled and Dimed – 3 Ways that Your Credit Card Keeps You Paying

Credit CardFor the majority of people, a credit card balance has become a fact of life. We use credit cards for everything from buying groceries to paying for our vacations. We plan out the best way to earn the most rewards. Usually we even depend on them as our main way to build credit. When it comes to credit cards there are certain things, like paying our monthly payment on time, that we all have down pat. However, there are a few hidden ways that credit cards keep us paying without us even realizing it.

Believing that Carrying a Balance Will Help Boost Your Credit Score

About half of all Americans believe that maintaining a balance on their credit card will help to boost their credit score. Unfortunately, that is a far too common misconception. The only thing that maintaining a balance on your card is really doing is causing you to have to hand over more money to the companies in the form of interest payments. The best way to avoid spending this money is to pay off your card in full every month. Having a credit card in your name is enough to build credit, there’s no need to maintain a balance and rack up unnecessary fees.

Maxing Out Your Credit Card

Not only will this cause you unneeded interest payments, but it will also hurt your credit score. However, four out of five Americans don’t realize that charging their credit card up to the credit limit is actually hurting them. This is because creditors want to see that you’re responsible and not compulsive. So don’t let those high credit limits fool you, staying at or below half of your limit is ideally where you want to stay.

Neglecting Your Rewards

This is an easy way for credit card companies to get away with not dolling out those extra perks that probably convinced you to get the card to begin with. What’s the point of earning the rewards in the first place if you never get around to using them? While the points may not seem like much at the time, they will definitely add up in the long. So do yourself a favor and have them applied to your next credit card statement.

Assuming That the Annual Fee is Worth It

More often than not the cards with the higher annual fees seem to have more perks that accompany them. However, it’s important that you evaluate whether or not those perks are going to be worth the fee for you in the long run. You might find out that you’re spending $100 annually for rewards that you aren’t even using.

While credit cards may seem fairly straight forward as long as you keep your balance low and make your monthly payments, it’s important that you’re aware of ways they keep you paying unnecessarily. Take the time to review your statements and keep those balances at zero and you can save yourself, and your credit score, some long-term hassle.

If you find yourself struggling with debt or would like to find out about becoming debt free, call Debthelper.com at 800-920-2262, or visit @ www.debthelper.com.

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