Christian Business Networking Association

5 Most Common Credit Mistakes!

Overcharging is the primary cause of credit problems. However, there are some other credit mistakes that can work against you financially.

1. Not valuing your credit. Good credit is a valuable commodity in today's economy. Bad credit, including a bad credit record, late payments, etc. can create a negative financial profile that can surface when you have a legitimate need to borrow. Buying a home is a necessary use of credit that few people can avoid. Abusing short-term credit obligations, or over-extending through sort-term debt, can cause a mortgage lender to reject your application for a home mortgage.

2. Allowing a need for status to overrule common sense. Most credit card companies now offer a "status" card, targeted to the consumer's desire to have the very best of everything. Status cards often have higher credit limits, more frills and the highest annual fees - from $75 - $100. Avoid paying extra for status. The basic card from the same company offers the same basic features, and a much lower annual cost.

3. Raising credit card limits. If you use credit cards, avoid raising your limit. An increased limit it merely an increased temptation to buy. Many companies notify you that they are raising your limit. Take such notices as a warning signal. If you're such a good customer that the card company wants to give you more credit, chances are you've been using your credit card for more than emergencies! To refuse an increase simply call or write the card company and say, "Thanks, but no thanks!"

4. Stretching out a loan to get lower payments. When using an installment loan, people often want to stretch out the life of the loan. Their objective is lower monthly payments, but the result is higher interest charges over the life of the loan. You should always select the shortest payment period possible to avoid overpaying. If making the payment will be a struggle (for car, appliance, etc.) ask yourself whether the purchase is really a good idea.

5. Not knowing your interest rate and fees. Fees vary widely among cards. Always make sure you know what the rate and annual fees are before you accept the card. If you have existing cards, check the rate you're paying and, if it's high, shop for a card with a lower rate.

These common mistakes could cost you hundreds of dollars - dollars you could instead be using to build future security!

For more information, please check-out my website www.primerica.com/jwharrisjr