Save before you buy!
Putting your next impulse purchase on your credit card might be easy, but that doesn't always mean it's the right thing to do. In fact, next time you use your card, there are a few rules you should follow.
Narcity spoke with Angela Iermieri, a financial planner and spokesperson for Desjardins, who revealed the credit card mistakes you are probably making that you should stop doing ASAP.
Using your credit card instead of saving for projects
In an interview with Narcity, Iermieri revealed that you should never be using your credit card for big expenses that you don't have the money for.
Often, impulse buys can lead to credit card users losing control of their budget. Instead, you should always be saving for these big projects, and paying for them with that money.
"First of all, using their credit cards instead of saving for a project. Sometimes we often see that for impulse buying, 'Well, I can just put it on my card for now, I'll get it, why wait until I have the money saved up for it?'" she stated.
"But that's how you lose control of your budget. Because it just comes up to say that you have an extra payment at the end of the month, because you do have to do payments on your credit cards."
"It's not there to buy whatever you want to buy and then you'll save for it later," Iermieri concluded.
Making your credit card payments late
Another mistake that people with credit cards often make is making payments late. Iermieri reveals that even if you're just paying a small minimum payment on your card, it is still really important to do it on time.
If not, this can lead to poor credit scores and even trouble being able to get larger amounts of credit down the road.
"Sometimes people either pay their credit cards late, or they don't put the minimum payment, saying 'well it's such a small amount, I'll just add it to my next payment,'" she revealed to Narcity.
"But by doing so, by you not reimbursing your minimum monthly payment it's a late fee, which also affects your credit score and it will affect when you want to ask for further credit later on."
Only paying the minimum payments
While making your minimum payments on time is important, Iermieri reveals that credit card users should always be paying more if they can.
In fact, if you continue to just pay the minimum payments all the time, it can be hard for you to ever be able to pay off the debt you have accumulated.
"You cannot just go on paying just the minimum on your credit card because with the interest rates that are charged you will never reimburse it."