One common misconception is that using a credit card starts a never-ending debt cycle. When it comes to debt, people who use credit cards for costly, impulsive purchases and then, whether on purpose or not, forget to make the payments are the worst offenders. People who use credit cards frequently make decisions that could make it harder for them to continue living the way they currently do because they lack product knowledge. If you want to maintain stable finances and avoid debt, you should never use your American Express Credit Cardfor the following purposes.
Keeping a more than 30% credit utilisation ratio
The percentage of your credit limit that has actually been used is known as your credit card’s utilisation rate. The same way that you check your credit score on a regular basis, you can also keep an eye on the approval American Express Credit Card Application Status. Remember that credit bureaus have the right to deduct points from your score if it rises above this threshold. Customers who use credit more than thirty percent of the time are often perceived by lenders as being credit-hungry. Your suggested credit card spending limit should be 30% of your credit line maximum. If you frequently go over your credit limit, you should apply for a second credit card or request an increase from the company that issued your current American Express Credit Card. Even if you do not increase your credit card expenditure as a result of the increase, using credit cards to raise your overall credit limit will lower your credit usage ratio.
Paying the very minimum bill very month
Many credit card users erroneously think they can avoid financing costs by just making the minimum payment necessary. There will still be significant finance charges applied to any past-due debts, with rates ranging from 23% to 49% yearly. Even if the cardholder could have prevented these costs by paying the minimum amount due on time, he is still responsible for any late fees and any damage to his credit score. On any subsequent credit card transactions, interest will be assessed if any balances are not paid in full at the time of purchase. Unpaid amounts will remain unpaid until they are.
How to proceed: If you’re finding it too difficult to pay off your credit card debt all at once, consider spreading out the remaining balance over a few months. The interest rates on these EMI conversion loans are significantly lower than those on financing, and the loan durations range from three months to five years. Your American Express Credit Card account will be paid off in full because the interest rates are substantially lower and the monthly payments are smaller. If you’d like to know whether your credit card application has been approved, you can also request a balance transfer and monitor the American Express Credit Card Application Statusfor that request.
Ignoring the expiry dates for utilising reward points
Depending on the credit card’s reward point programme, points earned through purchases can be redeemed for a range of products, such as gift cards, airline miles, purchases at specific retailers and/or online partners, balance deductions, and more. The majority of credit cards, however, have expiration dates for reward points that range from two to three years. In general, credit card companies don’t always give out valid reward points. Verify the American Express Credit Card Application Status approval after applying to make sure your reward points haven’t vanished or expired.
How to proceed: Cardholders should always be aware of the various terms and restrictions related to their redemption of reward points, as well as the expiration dates of the points they have earned, to ensure they don’t miss out on the benefits of using their credit cards. They may be able to maximise the value of the reward points they have already accrued by doing this.
Saying no to credit limit increase
Raising credit limits can be difficult for some credit cardholders because they fear going over their spending limit and getting caught up in a never-ending debt cycle. An increased credit limit, however, can significantly help your overall financial condition if used wisely. The best course of action is to accept credit card companies’ offers to quickly raise your credit limit. By enabling you to use your American Express Credit Card for larger or unforeseen purchases, increasing your credit limit can help you become a better money manager. A larger credit limit will not only increase your credit limit but also improve your credit score, lower your credit utilisation ratio, and increase your eligibility for future credit cards and loans. You can request that your current card issuer increase the limit on your account if they haven’t already. You can then use the American Express Credit Card Application Status.
Frequently utilising a credit card to withdraw cash
For credit card withdrawals, the maximum cash advance fee is 3.5% of the total transaction amount. From the moment the money is taken out until it is returned, additional financing expenses are incurred. Making every effort to restrict the amount of money you withdraw with your credit card is the best course of action. If at all possible, give back all of the money that was taken out. You can reduce the additional interest payments associated with loan fees by doing this.
Now that you know the bad credit card habits to avoid, it’s time to get acquainted with the different types of credit cards available. Co-branded cards, secured cards, cashback cards, reward, lifestyle, travel, and premium cards are just a few of the numerous credit card options available. Which credit card is the best? To be honest, there isn’t a single best method for figuring out which card could be the best. Everything will be determined by your needs and financial objectives. A travel credit card might be your best bet if you travel frequently. It may be simpler for you to obtain a secured American Express Credit Card if you have already deposited money with the bank that offers them. In the same vein, you might want to consider applying for a rewards or cashback credit card if you shop online on a regular basis.
