KNOXVILLE (WATE) – If you check your purse or wallet, chances are you have at least one credit card.
Despite the convenience of paying with a card instead of cash, there are some mistakes you can make that may cause long-term damage to your financial standing.
1. Check your credit report
When was the last time you checked your credit profile and took the time to review the information in it?
It’s easy to assume that your report is stellar based on your past reviews. However, all it takes is a fraudster who has stolen your identity — to lower your credit score.
Your credit report also may contain errors. Common mistakes on credit reports include errors in a consumer’s identity, incorrect reporting of an account’s status or balance according to the Consumer Financial Protection Bureau.
A few examples include:
- Finding someone else’s credit information in your report
- Your closed account may be reported as “open,” or vice versa
- Errors you thought had been corrected may reappear on your credit report
These mistakes can cost you money — from higher interest rates, smaller lines of credit or credit denied.
2. Cash advances
A cash advance on your credit card is actually a short-term loan and an expensive one. It involves much higher fees than a cash withdrawal using an ATM or debit card.
Get ready to pay not only an ATM fee but also a steep cash-advance fee and you’ll pay a steep interest rate. Don’t use a cash advance if you can help it.
3. Late payments
Picture this, you’ve been struggling to make ends meet. Instead of calling your creditors to see if any payment arrangements are available, you ignore the accounts.
Then a few months go by, and you receive an alert from a credit score monitoring service. Your credit score has plummeted.
It takes just one late payment, as little as just 30 days late in some cases, to tank your credit by as much as 100 points. Your card company also might raise your interest rate if you are late repeatedly.
4. Credit card overages
You’re probably well aware that once you reach your card’s credit limit, denials at the point of sale are to be expected.
If you have agreed to permit over limit charges, you generally can be charged a fee of up to $25 the first time you exceed your credit limit and a fee of up to $35 if you are over your limit a second time within six months.
5. Bank and credit card statements
Like your credit report, your bank and credit card statements may have mistakes, but if you don’t open and read those monthly statements you’ll never spot the problems. It’s a good practice to examine your account activity on a weekly basis to catch any problems early.
You’re not liable for fraudulent transactions unless you wait longer than 60 days to report the error to the card company. It’s your job to keep an eye out for mistakes.