5 mistakes on credit cards that would thrill your credit card issuer

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It's extremely easy to apply for a credit card these days. In fact, you need not bother to apply for one as you would most probably get calls every other day asking you to have one. Your misery will start once you are not disciplined in your approach with regards to a credit card. Here are five mistakes to avoid.

Hefty late payment fee of 30 to 36 per cent annually

If you have missed a credit card payment the interest rates could be anywhere between 2.5 per cent to 3 per cent a month. That's a whopping 30 to 36 per cent every year. Before you realise your interest amount outstanding would be the same as the principal amount.

Again a charge of 30 per cent on amount of limit exceeded

You are charged an interest rate of 2.5 per cent per month if you cross your credit limits. This is again a whopping 30 per cent annually on the extra sum. Moreover, your credit rating also goes for a toss.

Annual charges are not waived every year

If you are naïve and apply for a credit card thinking that there are no annual fees, be careful. In fact, in most cases the annual fee is waived only in the first year or if you spend a certain sum.

Rating maybe affected

If you default in your credit card payments your credit rating gets affected. This means you may not get another loan, as your credit rating dips.

Try avoiding a credit card in the first instance

If you are inclined to spend, its best to avoid credit cards.

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