The Federal Reserve may havecut interest rateslast year, but credit card APRs are stillwell over 20%.
Here are eight pitfalls to avoid.
The best way to avoid late payments is toknow your credit card bill’s due date.
Most credit card companies will let youset up monthly auto-payments, so you won’t skip a beat.
Your bank might refund your late fee and interest, but it isn’t required to do anything.
For example, imagine you owe $5,000 on a credit card with an interest rate of 20%.
It’s best to pay off any purchases you make right away, if possible.
If you currently carry credit card debt, make a plan topay off the debt.
But using your credit card for acash advanceis a big mistake.
Most cards will also include a transaction fee of 3% to 5%.
If pursuing a reward causes you to overspend, you could end up carrying a balance on your card.
The interest charges could wipe out any value you earned from the rewards.
Also, the introductory 0% rate only lasts for so long, typically between nine and 21 months.
That means you’ve got a limited time to pay off your balance before a higher APR kicks in.
Then pay that amount monthly to pay off your balance while you are borrowing without interest.
Not checking your billing statements regularly
How often do you check yourmonthly billing statement?
Spending $20 here and there may not seem huge, but it can add up quickly.
Tracking your credit card spending isn’t the only reason to check your billing statement.
You should review transactions for potentialfraudulent chargesandgray charges.
