7 Things You Should NEVER do With Your Credit Card


if you have a credit card then you have
a great tool to build your credit score and credit history using it the wrong
way can be very costly in this video I’ll talk about the 7 things you should
never do with a credit card making any of these credit card mistakes could cost
you money and precious credit score points hey guys my name is Ramy and
welcome to points pointers my goal for this channel is to help you earn and
redeem as many points as possible to upgrade your travels for little to no
money so if you’re interested in learning all the tips and tricks for
travel hacking and award travel and I mean who isn’t then please consider
subscribing to this channel also you can get my free 10 step beginner’s guide for
award travel in the description below the first thing you want to avoid is
making cash advance purchases on your credit card this means using your credit
card at an ATM machine to take out cash this is terrible because you’ll
automatically be charged a fee anywhere between three to five percent of the
amount of money you take out and on top of that the interest charged on such a
purchase can be between 19 to 25 percent all these charges are definitely not
worth it the second big mistake you need to avoid
is missing a payment when you miss a payment not only will you get slammed
with fees and interest charges you’ll also lose a bunch of points on your
credit score that’s why I always recommend you pay your credit card bills
in full each month but if for whatever reason you’re unable to do that at the
moment then please please make sure you at the very least pay the minimum
payment on time if not early number three is maxing out your credit cards
this is very bad practice especially if you have a short credit history or you
have a short relationship with the bank that issued you a credit card in order
to maintain a healthy credit score you want to always keep the amount owed less
than 30 percent of the amount of credit line you have so if you have one card
with a limit of $1,000 try your best to never put
more than 300 dollars of spend on that card each billing period if you have
higher credit limits on one or more credit cards then I recommend keeping
the utilization percentage below 10% the less you owe the better your credit
score is number four is a pretty common mistake that people new to reward cards
tend to make and that is overspending to earn rewards you keep telling yourself
oh let me buy this let me buy that and making the excuse of Wow I’ll be
earning a ton of valuable points on these purchases but if you make a habit
of this and then not being able to pay your bills in full and on time then you
start carrying a balance that balance will be slammed with large
interest charges that will definitely outweigh any sort of value you can get
from your points so never buy something with your credit card that you can’t
afford only buy stuff that you have the money for so when the bill comes you
can pay it in full and on time number five is closing old cards when
you close a credit card account you lose the credit limit you had on that card
and this will automatically raise your utilization percentage that I explained
in point number three so if you have an old card that doesn’t have an annual fee
I highly recommend you keep it open number six is forgetting about an old
account this is a mistake that my wife actually fell for and it cost her
about 70 points on her credit score but thankfully after a couple of phone calls
over a few weeks it got resolved my wife had bought a pair of shoes from Macy’s
that she used a discount coupon on and in order to use that coupon she had to
pay for the shoes with her Macy’s credit card now she also used a gift card on
the purchase and the total amount charged on her Macy’s card was like twelve
dollars or something like that so she doesn’t have an online account for that
card because we never really use it and we never got a bill for it in the mail
so we totally forgot about it thankfully I had signed her up for
Credit Karma and since she missed the payment for over sixty days she got an
email from Credit Karma saying hey your credit score dropped significantly log
in to see what happened long story long she had to call Macy’s to pay for the bill over the phone and she told the phone rep that since she
never received the bill and never missed a payment before to make sure to
report to the credit bureaus and reverse the payment delinquency and sure enough
within a couple of weeks we actually received a letter in the mail from
Macy’s confirming that they reached out to the credit bureaus to correct the
situation and her credit score shot back up to where it was number 7 is using
your credit cards to pay for your mortgage college tuition or utilities
most likely you won’t be allowed to pay for such expenses with a credit card but
you can do that through a third party or actually some utility companies allow
you to use credit cards but in both cases you’re most likely going to be
charged a fee for such purchases on top of your regular payment now the fee can
be 3 percent or higher which is not worth it and will offset any rewards you
earn when you make the payment and it will also end up costing you more money
anyway the only time I recommend paying for these kind of bills with a credit
card is when you’re trying to meet a minimum spend requirement on a new
credit card you got where you have to spend you know something between 3000 or
4000 dollars in the first three months then it becomes worth it in order to
meet that spend that’s it for the 7 things you should never do the credit
card let me know in the comments if you have any questions and what other
mistakes do you think people should avoid making with their credit cards
thank you guys for watching and if this is your first time here I would love to
have you subscribe because every week I’m publishing videos that will help you
earn a ton of credit card points and frequent flier miles that will enable
you to travel the world for little to no money

One comment on “7 Things You Should NEVER do With Your Credit Card”

  1. Zipporah Ekane says:

    LONG STORY LONG HAHHAHA!

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