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7 credit card mistakes experts never make

Credit cards are valuable tools, but they're also misunderstood. Here's advice from someone who eats, sleeps, and breathes credit cards.

By Stacy Johnson Nov 10, 2011 4:15PM

This post is from Jason Steele at partner site Money Talks News.


MoneyTalksNews on MSN MoneyUsing credit cards wisely was the cornerstone of the personal finance education I received from a very young age. In fact, it's probably one of the chief reasons I decided to carve a career from writing about credit cards and other personal finance topics.


These days I often spend hours reviewing credit card offers, and still learn new things every once in a while. And I still see card users making fundamental mistakes in the way they manage their cards.

Here are some top mistakes some people make that I wouldn't.


1. Paying your bills late

The golden rule of credit card use is: Always pay on time. How do I avoid paying late? First, I always demand paper statements. Getting a letter in the mail makes my payment so much more urgent than an email reminder that my statement is ready. Conversely, I always pay my bills electronically though online banking. This removes any post office-related uncertainty.


But however you choose to stay on top of your charges, do it. The only reason you should ever pay late is if you absolutely, positively can't scrape up the money. Bruising your credit score simply because you spaced out is dumb.


2. Paying less than the balance in full

After paying on time, paying balances in full is the most important habit you can develop. Paying in full and on time avoids interest and fees while entitling you to free use of your bank's money for up to 55 days. Not paying in full means paying interest, which translates into handing over significant amounts of money for basically nothing. This is not the road to riches.


3. Paying your bills early

Use electronic payments -- not paper checks and snail mail -- to dictate precisely which day money is transferred from your account to your card company's. This maximizes the interest earned on your checking balance -- admittedly a fraction of a percent these days, but still something -- while closely regulating your cash flow.


4. Paying late fees

Being a credit card expert doesn't mean I'm superhuman -- I still make mistakes. When I do, I always follow up with a brief phone call to my bank to ask them to waive any fees. Guess what? I've never been turned down. Your credit card issuer wants to keep your business, so if you ask only occasionally, you'll probably be successful. Post continues below.

5. Paying foreign transaction fees

I don't live a life of international travel, but I do have family overseas. When I leave the country, I hate paying foreign credit card transaction fees that are often as high as 3%. Fortunately, there now are many cards on the market that don't have these fees. Capital One has never charged them, while Discover and PenFed have recently announced they're phasing them out of all cards. Also, Chase has dropped these charges on several of their high-end products that are marketed toward travelers. (For more, see Foreign Transaction Costs – and 5 Other Credit Card Pet Peeves.)

6. Missing out on a big sign-up bonus

Frugal people like me may not get to rack up hundreds of thousands of miles a year through credit card spending, but we can still enjoy some generous sign-up bonuses from time to time. The key is to refrain from applying for a new card until you're assured you're getting the best sign-up bonus you can. Sometimes it is a matter of choosing the right Web link to apply from, while other times it's just a matter of waiting for the best offers to emerge. (For more, see The 5 Best Credit Card Sign-Up Bonuses.)

7. Playing the 0% game

Many cards offer promotional financing offers of 0% on purchases and balance transfers. So what's the harm in that? Well, for one thing, they encourage you to spend money you may not have. Furthermore, maintaining a large balance will eat up your available credit, hurting your credit score. Finally, even 0-percent balance transfer offers often come with fees of 3% to 5%.


Playing the 0% game is playing with fire. These offers are so common because the banks know that you're likely to pay interest in the end.


More on Money Talks News and MSN Money:

Nov 10, 2011 6:45PM
Numbers 1,2 and 4 are a big deal.  The others are situational and don't apply to everyone.  But Never pay late.  And pay it off each month.  The key being, if you pay it off each month, you aren't spending money you don't have, and then paying interest on that.
Dec 3, 2011 6:41PM

The bill comes in.  Pay it. If you don't have the money you should not have a credit card.  Why do we constantly make this into an issue?  It is as basic as it gets. iif you are paying fees you are lazy and not paying attention to the important things.

Nov 11, 2011 2:15PM
I disagreed with #7 until the sentence about the balance transfer fee. I do the 0% game all the time as long as there are no fees. A store wants to let me buy something I will buy anyway for 12 months 0%, I'll do it. I'm not sure how he can support #3 (don't pay early to maximize interest on your checking account) but not support 0% interest. Like I said, the only exception is if they charge a fee to get the 0% which is usually the case with balance transfers but new purchases usually don't have a fee. That said, don't use it as an excuse to buy won't you don't need and make sure you pay it of by the end of the promotion period or a lot of them will go back and charge interest from day 1.
Wow, it appears that if you're not a credit card "expert", you must be an idiot. These are pretty much the basic 101s of credit card management. Still, I'm glad I read down enough to see that  foreign transaction fees are apparently not mandatory charges. That 2% or so convenience fee really adds up on business and travel charges. If I can get a credit refund I'll owe the authors a debt of gratitude.
Dec 3, 2011 10:23PM

How much longer are people going to let the media tell the public that they are all idiots.Simply because we aren't the so called experts, here is a real news flash. All of the above listed, should be common sense to most people and for many these suggestions actually are.

U.S financial media is a joke, the author of this article is a joke.

Enough with this useless information, post something truely relevant or get out of reporting.

For the sake of everyone, please Stacy Johnson

Dec 3, 2011 8:41PM
What I do is consider the day I get the bill in the mail, is the day it is due. I write the check the same day and mail it the next (or the same day if I go out again). I have no idea of any "due dates" of any of my bills. I work my budget on when I recieve the bill-not when they are due. I have found this to be a good way to not forget about them and my credit score prooves this is a good decision.

We need to stop subsidising the rest of the world. We need to stop being the world`s policeman. We need to stop being the world`s conscience. WE NEED TO SOLVE OUR PROBLEMS HERE AT HOME!!! 12% unemployment rate for returning veteran, shameful!!!! We need to apply all our resources to solving our own problems here at home and stop trying to fix everyone else`s problem. Our rallying cry needs to be " AMERICA FIRST!!!" We need to address our shortcomings, we need to prescribe strict term limits on our Congress and limit the amount of outside influence on our government. It is not our destiny to provide for the rest of the world. When we as a country can feed every person, house every person and EMPLOY EVERY PERSON, and raise our education level to where it needs to be for us to be competitive in the world then we might think about the rest of the world. "AMERICA FIRST!!!!!" To be honest who cares what the rest of the world thinks about us? I don`t really care what they think, I am more concerned with my country that I served. Do you really care?




Dec 3, 2011 10:41PM

Very interesting comments here but there are two sides to this story. First if the bill does come pay it! The flip side to it is with people not working some have to rely on credit cards to live day to day. Unfortunately that is just how real life is. Life is just full of unexpected events. Again if you have the money makes the darn payment. Your life will be so much better in the long run.

Dec 4, 2011 12:07AM

Paying online or by phone only works if your card company do NOT charge a fee. I forgot once and wanted to pay by phone. lesson learned. That 15 dollar fee help me remember for next time.

Dec 3, 2011 10:51PM

Mistake #1: People thinking they got have all sorts of stuff as if it will make their life full and magical. Mistake #2: Getting a credit card or cards and chargins all this fluff and folderal. Wanna' be rich? Pretend you have a credit card and put the payment into your retirement account for 30+ years. You'll have more money than you will know what to do with.

Dec 3, 2011 11:25PM
The comments here are better than the article.
Dec 3, 2011 9:15PM
I take my paper statements & write the amount due on the due date of the calender .... usually on the first weekend of the month I schedule all my payments online on their due dates ..... checking off as I  go as to not double pay or skip anyone ..... has worked for me for years ......... use 0% offers as often as I get them ..... especially the 0% for one yr if paid in full (Sears)
Dec 4, 2011 2:17AM
Credit is for fools! Cash is King!!!!
Dec 3, 2011 11:12PM
My Tip is to keep information like % of rebate for Gasoline, Grocery, All other Purchases, etc on the back of the Credit Card. Write this info on a sticky "post it". Write it on the end that sticks. Cut the strip with the info off and stick  it to the back of the credit card. This way you just flip the card to see what you want to use it for. I use the card with the best rebate only for those purchases.
Dec 3, 2011 10:18PM
I have done all of these things.  Always pay bills on time or early and always pay off full balance.  I was just denied a credit limit increase.  I am at what I started at 7 months ago.  I waited the 6 months, so WTF?
Dec 3, 2011 8:13PM

The "demand paper statements" is what I used to do until I started getting statements a week after the payment due date. Wonder how that happened? Why was it taking over 3 weeks from the cut off date to get a statement to my house? I was never late with a payment so that wasn't an issue but here is what I discovered surrounding this occasional issue. The local USPS (snail mail) always blamed the credit card company for not sending the statement on time. Plus, they could not investigate because the credit card company uses 1st Class bulk mail which does not put any cancellation postmarks on the envelope. So there was no proof of when the statement was mailed. The credit card company would not investigate or give any information regarding their billing/mailing procedures. I got the impression that the billing and mailing was contracted out to a billing service. It always fell to I am responsible for a timely payment whether I get a statement or not. I accept that but don't put me at a disadvantage. Further investigation on my part also revealed that there is a problem for the USPS if the envelope is not a standard #10 or regular personal size. My credit card company uses a small square envelope as did my phone company which I also had problems with delivery and missing bills. A local bank I use sends statements in a larger greeting size envelope and they would be missing 3-4 times a year. There is also a pattern of delivery issues for incoming and within the city but not for outgoing mail where I live. If the USPS is a problem, document everything and never complain to the local post office. Look up the national 1-800 number for delivery complaints and calmly give the issues you are having and get a reference number and say yes to being contacted by the local postmaster. This will go on record for that facility and they must answer and report to a higher authority. If you complain to the local directly it will not go any further and usually will not have any effect on poor delivery. But not to put all the blame on the USPS I did find that the credit card company I use does have a lot of complaints about slow or non delivery of statements. The credit card company I have problems with? HSBC. A credit card/bank I never had statement delivery issues with? Bank of America. They use a #10 envelope for all statements. Go figure that one. Maybe the envelope size is the issue. Or maybe some credit card companies are trying to get you to be late because you pay on time and in full every month which pays them the minimum they can get from your business. As far as this article and the demand paper paper delivery goes, I understand the reasoning behind it. Electronic statements and reminders are very easy to let go because they aren't in your face like a paper statement lying around the house.

Dec 4, 2011 12:09AM
Who needs credit cards when Obama gives you 3 years unemployment, food stamps, and free health care?  I got my payments on the mortgage reduced $50,000 with 1% interest ($350) payment on a $150,000 home.  I have had a 3 year all expense paid vacation.  Don't mess with Obama, I say 4 more years and keep the money coming in.
Nov 10, 2011 6:59PM
The creditors do NOT want to work with you!!! I tried that and everyone of them were rude and not helpful at all. I filed bankruptcy and now I owe NOTHING, bet they wished they had worked with me. NO REGRETS!!
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