7 Awful Timing Mistakes that Credit Cardholders Make

There is an old adage, “timing is everything.” And it certainly holds true, whether you’re out to book profits in the stock market, or aiming to use credit cards to earn hundreds of dollars through reward points.

A simple piece of plastic such as the credit card has the power to get you low interest loans for your business. It can even help you obtain free airline tickets for a trip anywhere in the world. However, in order to achieve this you need to make sure that you do not make any critical timing-related mistakes. Else, you may find that you’ve incurred hefty fees or damaged your credit instead.

Given below are a few timing mistakes that many cardholders tend to make. In some cases, these have cost the consumer thousands of dollars in terms of missed financial opportunities!

1. Paying Credit Card Bills Late

We all know how dangerous this can be, yet it is easy to make this error if there isn’t a set system in place. For example, you may forget to pay your bill if your due date comes around while you’re on vacation or around the time when you’re getting married! To avoid this situation, consider setting up auto-pay, either through your bank’s bill pay service, or through your issuer’s website. If you tend to face cash flow issues on a regular basis, you can even change your due date to sync with your pay day.

2. Making a Big Purchase Right Before Your Billing Cycle Ends

This can make your life difficult if you pay your bill in full every month, as it would give you just three weeks to come up with the entire amount. A better course of action would be to make the purchase right after your statement for a particular month has been issued. Since this signals the end of a billing cycle, you’ll get more time to come up with the money you need to pay off the bill.

3. Not Paying Off a Big Purchase During the Interest-Free Period

If you buy a big-ticket item that offers 0% financing for a given period of time, make sure you pay off the entire amount at least a month early.  The same goes for balance transfer deals that offer promotional interest-free periods. Else you may find that you’ve been hit with interest charges on the entire purchase when the last month rolls around, or if you make even a single late payment.

4. Presuming that Cash Advances Have Grace Periods

This is one of the costliest mistakes that you can make. Cash advances are associated with high fees and steep interest charges that start accruing immediately. Thus, avoid taking out cash advances under all circumstances. In case you do have to go for one, make sure you pay it off as quickly as possible.

5. Not Making Allowances for the Time a Check Takes to Arrive

Many cardholders still prefer to pay their bills by sending a check through snail mail.  In such cases, care should be taken that the check is sent within a week of receiving the statement in the mail, so that the card company has enough time to post the payment to the consumer's account. By law, the cardholder has 21 days from the time the bill is issued, which isn’t much if you wait until the last minute.

6. Not Spending Enough on Time to Qualify for the Big Sign-Up Bonus

To attract new customers, most card companies offer thousands of points as rewards if they spend a certain amount through their card within a certain period of time. For example, a card may offer the holder 20,000 bonus points if she spends $4,000 within the first four months of owning the card. If a consumer fails to spend this minimum amount within the timeframe, she may end up losing hundreds of dollars in rewards. To avoid this, cardholders should note the time by which they have to spend the stipulated amount on their calendars, as this may help them achieve their goal. Additionally, to avoid confusion and spending constraints, one should avoid applying for multiple cards at the same time.

7. Paying the Minimum Due Too Early

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