If you are about to turn 30, we've got some news for you: You are already an adult and should start behaving like one! Especially when it comes to credit cards.
As you approach your 30th birthday you should start realizing how an adult behaves and learn from their mistakes! Especially with your finances. One of the greatest issues of this era is credit cards...
Credit cards can be a financial ally if you learn to use them correctly, but they can severely damage your finances if you misuse them! You can end up with a lousy score and high-interest debt.
So, the first thing you'll need to learn is how to stop committing the same mistakes with your credit cards. Here are some tips you can use to improve your finances when you turn 30!
Typical credit cards mistakes
- Minimum payments: Please, stop doing this! If you only make minimum required monthly payments you'll keep accumulating high-interest debt, and this can be a huge problem. It can actually take you years to pay this debt! So, the lesson here is that you should try to always pay more than the minimum each month and pay off any debt left.
- Late payments: This is also a big mistake as it can have a damaging impact on your credit score. It is said that late payments will remain on your credit reports for seven years, so you definitely don't want this to happen. However, payments aren't officially listed on your report as late until it's 30 days past due, but the company may still charge you a fee, so try to make your payments immediately.
- Not paying: By now you should have realized that not paying at all is also a big mistake. If you stop your payments for six months, the credit card company will issue a "charge-off," which is a declaration by which the firm considers your credit card debt a loss on its balance shit, and this obviously will appear on your credit report! If you reach to this point, the company will probably shut your card off and you won't be able to use it. Besides, you will still have the responsibility of paying off that debt. If you are struggling to pay, you should call your creditor and try to solve the problem.
- Not reading credit card statements: Even if you pay your bills online, you should never ignore monthly statements. You should always check if the purchases that appear in your statements are actually yours, you never know when a fraudulent purchase can appear! This can be boring, but it's totally necessary! Remember to call your credit card company as soon as you see a suspicious transaction.
- Closing unused cards: Even though closing an unused credit card may sound like common sense, it can damage your credit score. The credit utilization ratio measures how much available credit you are using, the higher it gets, the more it impacts negatively on your credit score. This means that if you close a card, you will lower your available credit limit and increase your credit utilization ratio. So, keep your unused card and keep the ratio as low as possible.