When you apply for a credit card, you are likely in a hurry to see if you qualify. Many consumers are looking forward to having a credit card to use for convenience or rewards points but many fail to be interested enough in what they are committing themselves to when signing the credit card agreement. If you do not read the terms and conditions of each and every card you are applying for, you can end up owing a lot more money than you ever imagined and can quickly find yourself in debt you can’t get out of easily.

If you don’t read your credit card agreement or the fine print section, you will likely miss the important things such as:

Fees
One of the quickest ways to accrue debt aside from spending is the accrual of fees on your credit card account that you had no idea existed. Credit card companies these day make a profit on the fees they are charging their customers and until the new credit card regulations go into effect, you need to keep a close eye on what charges to expect. Late fees, penalties, over the limit charges, and even annual fees can rack up a decent amount of money many consumers do not realize they have to pay and therefore do not budget accordingly.

Variable Rates
Credit card companies have been taking a lot of flack over the last year from consumers who had no idea interest rates could be changed at the card company’s discretion with only minimum notice to the card holder. When interest rates made a big jump across the board, consumers were mad but had little fighting power when they realized the variable rates were part of the original cardholder agreement. Many agreements state the changes can come at any time and some for no reason at all. Accruing interest rate charges at 35% when you only thought it was 15% can do a lot of damage to a personal financial plan.

Promotional Rates
There is a lot of interest in interest-free credit cards but there is also a lot of confusion. Many consumers who are thrilled to have an interest-free credit card fail to realize that the interest-free time period only applies for a certain time, usually 6-12 months. After the promotional period ends, the interest rate they will be paying on purchases will be considerably higher.

Rate Levels
There are many times when a credit card company offers promotional deals and rates that only pertain to some purchases made on a card, while others hold fast to the regular rates. If you are not aware of how your interest rate levels can vary, you can end up overspending your money. For instance, you can make a regular purchase that qualifies for the interest-free promotional rate but get hit with a huge fee for the cash advance you took out of the ATM, which you really could not afford to pay back.

While it may be frustrating to have to read the small print that goes on for pages before you get a credit card, it is in your own best interest to do so. Otherwise, being left in the dark generally will result in your owing money you can not afford to owe or being held accountable for things you were unaware of. Remember also that credit card agreements are not all the same so thinking that just because you read one does not mean you have read them all. If, at any time, you do not understand terminology or the agreement terms, be sure to contact the company directly and get the answers you need before making a commitment to any credit card company.

When you actively use a credit card, it can seem like a real deal to spend oodles of money each month and only have to pay a small portion of it back each month. Minimum payments are what is required as far as a payment amount each month on the total balance due on the credit card. Many people make the mistake of using credit cards and only paying the minimum amount each month. This is one of the credit card no-no’s that lead to big, insurmountable debt.

Minimums Are Not Ideal
It may appear that since the credit card company doesn’t want more than the small amount each month, you should pay the minimum and nothing else. However, the reality is, the amount you owe isn’t cut and dry. Each month you are not paying more than the minimum, your account is still accruing fees and charges that will add on to your monthly balance. If you owe $500 total, a $25 payment won’t make a big dent in your total debt. If you keep charging on your card the next month, your debt only increases and the small payments don’t do much to bring down an increasing balance. If you can not afford to pay off the total balance each month, make a habit of paying more than the minimum. If you are having financial difficulties, making only the minimums for a few months may be the key to surviving some tough times but as soon as you are able, make sure you start paying more than the minimum.

Paying Off Debts Each Month
Ideally, when you make a charge on your credit card, you should have the cash equivalent in the bank that is being saved towards the payment at the end of the month. As many credit card users do not set such boundaries for themselves, many will find themselves struggling to make their monthly payment in full. It is truly the only way to avoid balances from adding up and saddling yourself with overwhelming debts. If you have too many credit cards with too many balances, it may be time to reevaluate the credit cards you have, and downsize to only one or two cards where you can more easily manage balance payoffs at the end of each month.

Use Interest-Free Promotionals
If you get a credit card that has a promotional offer for an interest-free term of six to twelve months, be sure you use it to your advantage. As you are not paying interest for a specific period of time, you need to take advantage of the promotion but also ensure that you can pay off the interest-free balance in full before the time expires. If you do not, you could end up losing more money than intended due to the usually higher than average interest rate that kicks in. If you use your interest-free card to make a big purchase, have a plan to pay it off in full. Without that plan, you can end up spending much more than you bargained for when you first got the card. Paying only the minimum over the time period of the promotion can lead to interest being incurred onto your balances.

Using a credit card does not always have to have negative connotations. If you use your card responsibly and have a plan for paying off what you owe, you can use credit cards forever successfully. Make the mistake of only paying the low minimums and you can find yourself in debt in no time flat.

Sometimes, it’s easy to get caught up in the world of credit cards. There’s a sense of power behind having credit at your disposal to be used however you wish. The problem with having this power is that at times, many people abuse it. First, you get one card. But soon your wallet is overflowing, and you are drowning in debt. Here are a few tips to help you avoid this, and save yourself a lot of trouble.
Limit Yourself: Just because someone offers you a card to their store, it doesn’t mean you have to accept it. Many department stores will offer you an initial rebate, plus future deals if you open up a credit card with their company. This may seem like a way to save money, but if you take advantage of all of these cards you’ll be swimming in credit card bills before you know it. Even worse, you may not keep track of what you’ve spent as easily. You could wind up spending ridiculous amounts of money without even knowing it, and then you’re stuck paying the bills. Stick to one primary card, and if you do decide to open up a store card, follow the next step.
Pay Off and Close: If you decide to open a card directly at a store, make sure to limit the amount of credit that you open on it. The best time to open a card is when making a large purchase. Usually electronics stores are the best places to do this. Once you pay off the debt on the card, close it. Even though having too much debt can be bad for your credit score, the same goes for having too much open credit.
Watch Out for Interest Rates: Many places will offer you cards that seem like great deals, and at the time they might just be, but soon companies may start to price gouge you. You may start with a 4% interest rate, but soon enough you could get as high as 10-20%. This is why it is always best to get one card through your bank or credit union and keep it paid down. With fluctuating interest rates, having many cards could leave you in the hole.
Be Careful Online: A lot of people use their credit cards to shop online, but this can be one of the more dangerous things that you do. Buy something from the wrong place, and your information could be spread all over the internet. Always verify that the site is legitimate, and NEVER let anyone use your credit card to purchase something. You and only you should have access to your credit card number. This way you always know where your money is being spent.
Don’t Only Charge to Your Card: A lot of people make all of their purchases with their credit cards. This keeps them constantly in some form of debt. The best way to use your card is for big purchases, or during emergencies. Otherwise, use your debit card or straight cash. Having a hundred small purchases on your card will take up the space that you may need in the future for a large item. If you can keep your credit card debt under control, you will keep peace of mind, and money in your pocket.
Pay Off Each Month: Try to pay off more than the minimum each month on your card. You should budget out a certain amount from each of your paychecks to use specifically to pay off your credit card. If you try to spend the same amount on the card that you pay off each month, you’ll keep your head above water and have the credit available in case you ever need to make a large purchase.
If you ever find yourself struggling with credit card debt, learn to put it away. Pay for your purchases with cash, and pay off one card every chance you get. The best way to do this is to use your tax return when it comes. Remember, once you pay off a card, close it. That way your credit score will stay high, and the card won’t be there to tempt you anymore. Follow these tips, and you should stay out from credit card debt and be in the clear.