9 mistakes to avoid when using credit cards

(Baonghean.vn) - Using credit cards for spending and shopping is growing because of its convenience and many incentives. However, if you are not careful, you can spend more money from risks.

1. Open multiple credit cards

Nowadays, owning a credit card is no longer difficult; a person has the opportunity to own more than 1 credit card, this is a great temptation for those who cannot manage their spending.

And when evaluating credit ratings, if the credit institution knows that you have opened too many cards, your credit rating will not be high. Therefore, each person should only have a maximum of 2 credit cards; if the limit is high, you only need 1 card.

2. Don't confuse "amount owed" with "amount payable"

A credit card is a form of bank credit. If you can prove your income and have a good credit score, you will be granted a credit limit of up to 10 times your average monthly income.

This means that the amount of money that can be borrowed, or owed to the bank, is much higher than the cardholder's ability to pay. Because of this large difference, if customers do not balance their spending needs and their ability to pay, they can easily fall into a state of being unable to pay.

3. Spend just to get rewards

If you use your credit card for unnecessary things just to earn rewards, it can cost you.

Rewards are great, but changing your spending habits just to get a few free things won't be seen as beneficial. If you go over the limit and ruin your financial balance, you may lose all those rewards to interest charges.

4. Don't remember payment date

Having multiple credit cards or being too busy can lead to forgetting or misremembering the due date for your credit card payments. Then, you have to pay interest on your total monthly spending and incur late payment fees. More importantly, your credit history will not be good because you will be moved to the bad debt group if you still haven't paid the minimum balance by the due date.

So, overcome this situation by noting the payment date on your phone, work calendar or proactively paying as soon as you have money.

5. Disclosing information on the card

Unlike ATM cards, credit cards do not require entering a PIN (password) when making payments. Small mistakes such as lending your card to relatives or friends; handing your card to restaurant staff for payment, not putting your card away after use, etc. are the reasons why information on the card is exposed.

Simply take a picture of the front and back of your credit card and they will have all the information they need to use the card to make online purchases. So, keep your card information absolutely confidential and always keep your card within sight.

6. Using credit card at ATM

A mistake that many people often make is using a credit card as an ATM card. For each transaction of withdrawing money from a credit card, customers not only have to pay a high withdrawal fee but also have to pay bank interest immediately.

Not only that, the risk of information theft is also very high. Therefore, credit card holders should not use credit cards to withdraw cash.

7. Online payment through an intermediary site

Visa and master cards make it easy to pay for international purchases or transfer money online. But when using a credit card to pay, you should only fill in your account information on reputable intermediary sites or bank ebanking.

Avoid websites that ask for payment information along with your account (for monthly payments). They will charge you money at any time, and this is a "treasure trove" for hackers depending on the security level of the website you use.

8. Use credit card to pay by phone

Modern technology allows you to shop and pay with your credit card via your smartphone. However, many fraudulent individuals and organizations have their own tactics to steal information from gullible people.

When in doubt, call your card issuer for help. As a rule of thumb, if you are unsure about the source of a call or text message, never give out personal information.

9. Do not immediately report a lost credit card

Most card issuers have measures in place to protect cardholders from payments made on a lost card, but you must report it quickly enough to minimize the risk.

While some cards will allow you to completely remove fraudulent charges after reporting the card as lost, some will consider whether you will be liable for a fee, so report it as soon as you discover your card is missing.

Ngoc Anh

(Synthetic)