A credit card is a very powerful tool that can all too easily be misused. The following is a list of six financial habits that will get you into LOTS of trouble with your credit card in no time at all.

6. Disrespect your card: Just because its the size of a bus pass, don’t underestimate the impact this little sliver of plastic can have on your life. Whether it’s a positive or negative impact depends entirely on you.

5. Don’t pay your debts on time: You start being charged on your purchases as soon as the interest free period expires, but you are often charged interest from the date of purchase. That means as soon as you miss your payment date you are hit with up to 2 months of interest charges, not to mention additional late fees!

4. Use your card for cash advances: A cash advance is basically a cash loan. Whenever you withdraw money from your credit card using an ATM you are getting a cash advance. These are usually charged at even higher interest rates than purchases, and generally attract additional fees. You should only use your credit card for a cash advance as a last resort.

3. Don’t keep records of what you’ve been spending: Most people don’t realize how easy it is to lose track of their purchases – until their statement arrives in the mail. By then, of course, most of the damage has already been done. Whilst we all like spending money, most of us don’t particularly enjoy keeping track of our finances. Nonetheless, failure to do so almost always leads to severe difficulties down the road. Stick to a budget and always ask for receipts – as much of a hassle as it might seem now it will save you from a whole lot of pain in the future.

2. Be impulsive and self-indulgent: Sure everyone deserves to treat themselves sometimes, but how much of a treat would a horrendously large debt and a poor credit rating be? Learn to become financially disciplined and in time you will have the means to treat yourself a whole lot more often.

1. Only pay off the minimum each month: Undoubtedly the best way to end up with a massive and rapidly expanding credit card debt is to only repay the 2% minimum most cards require each month. Paying the minimum is very tempting because it allows you to spend your excess cash on other things. But by doing this, not only are you merely delaying the inevitable, you are making the eventual reckoning all the worse. Even if you are not increasing your debt, you may not be making any progress to actually repaying it – the minimum monthly amount is often not enough to offset annual fees and other miscellaneous charges.

Summary: Your credit card can be your best friend or your worst enemy – depending on how you choose to use it. Failure to treat your financial situation with the respect and attention it deserves could lead to lots of trouble in the not too distant future.

Related posts:

1. Four Ways to Get Your Money Back from a Credit Card Purchase
2. 6 smart ways to use your credit card
3. Different Ways of Calculating Interest
4. The CARD Act: How it Will and Won’t Protect You After February 22
5. Interest rates – one of life’s great mysteries…