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Applying For A Credit Card? Steer Clear of These Four Pieces Of Advice

Dec 20, 2018 1:38 PM 3 min read

One thing that can be found almost everywhere and in great abundance is free advice. A misinterpreted advice can do more damage than good. This is especially the case when money is involved. When it comes to credit cards, we have often come across “pieces of advice” that we realized, were more of a double-edged sword. Even though they seem brilliant at first, if you are not careful enough, they might actually tear your credit score apart. Paying close attention to these bits of advice and trying to understand what they truly mean can help you go a way long.


1. You Should Keep Multiple Credit Cards


When you keep multiple credit cards, you come across as a versatile borrower. If these credit cards are of different benefit type, you can enjoy various discounts, cash back and offers. If the billing cycle of these credit cards is different, you can enjoy the grace period for all of them and make the most of the “interest-free” duration. Now before you go strutting around getting as many credit cards as possible, one thing you should remember is that you need to MAINTAIN these credit cards to enjoy the benefits. If you do not pay your dues on time, your credit score might be affected adversely.

Applying For A Credit Card? Steer Clear of These Four Pieces Of Advice


2. Don’t Use Credit Cards For Day To Day Expenses


The world is divided into two types of people - one who recommend using credit cards for everyday expenses and the others who swear that nothing good can ever come out of it. Using your credit card for your daily expenses is a matter of responsibility and diligence. Always bear in mind that it is ultimately you who has to pay back the expenses that are being taken care of by the credit card.


3. Always Keep A “Balance” On Your Credit Card


This is an incomplete statement and a commonly misunderstood one. What people wish to convey when they say this is - “Do not use the entire credit amount that you are entitled to”. But what people hear is “pay only minimum balance”. Fair warning: Paying only the minimum balance will only incur more debt in the long term. Another fair warning: Using the entire credit amount that you are entitled to, will increase your credit utilization ratio and bring your credit score down.

Applying For A Credit Card? Steer Clear of These Four Pieces Of Advice


4. Get A Credit Card With Overall Features


A credit card that offers benefits in all spheres? What could be better than that, right? Actually, wrong. A credit card that offers multiple features might be less useful than multiple credit cards for specific purposes. For example, your overall credit card might offer you a 15% discount on common expenses. But a travel credit card might offer you huge stay benefits and ticket benefits. Similarly, if you have a credit card suited for online shopping, then you can actually save much more than you would with your “multipurpose” card. Analyze your lifestyle carefully before you choose a credit card.


Now that you know what all is to be taken care of while using credit cards, we hope that you will imbibe these bits of advice in a way they were meant to be taken. If you still have any questions about how credit cards affect your credit scores, do let us know in the comments below. Until next time!


Originally Published here.


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