The Complete Guide to Credit Card Dos and Don'ts

Credit cards can be a convenient and rewarding way to make purchases, but it's essential to use them responsibly. Always pay your balance in full each month to avoid interest charges.

Carrying a balance can lead to debt and negatively impact your credit score.

Having a good credit score can help you qualify for lower interest rates and better loan terms.

Don't make late payments, as they can result in costly fees.

Paying more than the minimum payment on your credit card bill can save you money in interest over time.

Paying your credit card bill on time is crucial, as doing so will not only save you from late payment charges but also protect your credit score from damage.

You should always try to pay the entire due amount, rather than the minimum, to avoid accumulating interest.

Never pay the bare minimum, as it will still incur a certain amount of interest, and you'll be better off paying the full amount.

If you're facing financial difficulties, you can pay the minimum amount temporarily, but be cautious not to increase your card limit with shopping sprees.

Late payments can have severe consequences, including damaging your credit score and incurring late payment charges.

Don't make late payments, and if you're struggling to remember the due date, try adding a reminder on your phone or computer, or circling the dates on a calendar.

It's essential to understand the charges associated with your credit card, including the joining and annual fee, late payment fee, cash advance fee, and over limit charge, before signing up for it.

Always read and understand the 'Terms and conditions' beforehand to avoid trouble afterwards.

Credit card rewards can be a great bonus if you use them wisely. You can earn points or cash back on your purchases, but it's essential to pay your balance in full and on time each month to avoid interest charges.

If you can't pay off your debt, the interest charged on your account balance will likely exceed the value of the rewards. For example, you might need 5,000 points to get a $50 discount on a plane ticket, but the interest on your outstanding balance could be much higher.

To make the most of credit card rewards, pay off your debt and use your cards responsibly. This way, you can enjoy the benefits of rewards without adding to your financial stress.

Using a credit card for everyday items can be a recipe for trouble. Consider that a $3 gallon of milk bought with a credit card can turn into a $30 gallon if you don't pay off the balance at the end of each month.

It's essential to keep common purchases like groceries and utility bills off of your credit card balance. This will help you get spending under control and avoid unnecessary interest charges.

Aiming to buy everyday items directly with monthly income using cash, check, or debit card is a more financially stable approach.

Maxing out your credit card credit line is not a good idea, especially if you're not sure you can make payments. Credit card issuers can charge over-limit fees to those who opt-in to exceed their credit limits.

If you don't have the money to make payments, it's best to avoid using the credit card altogether. This will help you avoid accumulating debt and unnecessary fees.

Chasing rewards can be a tempting idea, but it's essential to understand the value of those rewards. Credit card rewards are usually worth far less than the extra interest you'll accrue if you can't pay off the money you spend to earn those bonuses.

For instance, you might receive one point for each dollar spent, but you'll need to redeem 5,000 points to get a $50 discount on a plane ticket. This can be a losing proposition if the interest charged on outstanding account balances exceeds the typical 2% bonus.

To put this in perspective, if you have a balance of $1,000 on your credit card, and the interest rate is 18%, you'll pay around $180 in interest per year. In this case, the rewards aren't worth it if using a credit card is putting you further into debt.

Here's a rough estimate of the interest you'll pay on a credit card balance compared to the rewards you'll receive:

As you can see, the interest paid on a credit card balance can far exceed the rewards you'll receive. It's essential to prioritize paying off your debt and avoiding new debt to make the most of credit card rewards.

Regular text fields are highly vulnerable to outside threats, so make sure to always use an official payment gateway for capturing credit card numbers online.

Using a regular text field to capture card details is a risk you shouldn't take, especially with 35% of US consumers having fallen victim to credit card fraud.

Your CRM isn't a secure place to store credit card data, as it doesn't have the level of security required to be PCI compliant, making it a risk worth avoiding altogether.

When shopping online, it's essential to verify the authenticity of the website before making a purchase. You can easily fall prey to fake websites, so always check if the website is genuine.

Using a public computer or public Wi-Fi can put your information at risk of being hacked. This is a common mistake people make, but it's crucial to be cautious.

Make sure to use an official payment gateway for capturing credit card numbers online, as regular text fields are highly vulnerable to outside threats. This will help protect your sensitive information.

Here are some key factors to consider when it comes to online security:

Writing down credit card numbers is a major no-no, and for good reason. If you need to take credit card details remotely, use a secure payment gateway instead.

Don't write down credit card numbers, period. If you're processing a single payment on a manual machine, get the details over the phone and plug them straight in.

You should never ask for credit card information over email, it's just not safe.

Using your CRM as a vault for sensitive information is a big no-no. 35% of US consumers have already fallen victim to credit card fraud.

You should never store credit card data in your CRM, as it's not PCI compliant. This means it doesn't meet the security standards required to protect sensitive financial information.

In fact, it's simply not worth the risk of compromising your customers' financial security.

Storing credit card information safely requires a thoughtful approach. You don't need to store it if most of your buyers are one-off or infrequent customers.

To ensure compliance, work with a competent payment processor like Stripe, which regularly updates its hardware and software to ensure maximum data safety. This is crucial, as storing credit card data in your CRM is a risk not worth taking, with 35% of US consumers having fallen victim to credit card fraud.

Understanding PCI standards is also essential, as the risks involved in getting a PCI fine can be hundreds of thousands of dollars.

Using a Different Field for Capturing Details is crucial for security. Regular text fields are highly vulnerable to outside threats.

You should never use a regular text field to capture sensitive information like credit card numbers online. This is because they can be easily compromised by hackers.

Make sure to always use an official payment gateway for capturing credit card numbers online, like we learned from the example. This will help keep your customers' data safe.

If you're considering switching credit cards, there are several options to explore. You can find a card that fits your needs by comparing deals from across the UK market, considering introductory rates, promotional period length, fees, and the standard APR applied after the promotional period.

To increase your chances of getting a good deal, it's a good idea to check your eligibility rating for credit cards before applying. This can help you understand which cards you're more likely to get approved for.

Improving your credit score can also help you maximise your chances of getting a good deal. You can check your current Experian Credit Score with a free Experian account, and your Experian Credit Report can show you what's affecting your score.

You can usually apply for a credit card online, and some providers will tell you whether you've been accepted within minutes. Alternatively, you may be able to apply in person at one of the lender's branches.

Here are some key things to consider when switching credit cards: