Credit Card Mistakes Can Be Costly

Kiplinger magazine recently shared 11 Credit Card Mistakes to Avoid. Thought I’d pass along a couple of them here, and include a few of my own comments since I’ve made plenty of mistakes with credit cards over the years.

Bungling Balance Transfers

Moving debt from a high-interest-rate card to one with a low introductory rate can make financial sense–but only if you read the fine print. If you ignore or misunderstand balance-transfer rules, you could end up owing even more.

Boy have I screwed up in this area over the years. My first experience transferring credit card balances came in my early 20s. I managed to accumulate some credit card debt in college by using my card for emergencies like late night pizza runs, t-shirt sales at the bookstore – you know, the bare essentials.

One day, I received in the mail an offer to transfer my balance at 0% interest by opening a new account. Well that seemed like a no-brainer!

Unfortunately, I didn’t read the fine print and see there was a balance transfer fee of 3% of the transaction, which negated a good bit of my interest savings. I also made a critical mistake by leaving the old credit card account open, and when the next “emergency” hit I swiped the card again. Now I owed balances on two cards. Ouch

Ignoring Monthly Statements

Reading your bill can also help you understand how long it will take to pay off  your debt. As mentioned earlier, the length of time required to retire your balance by making minimum payments is displayed, as is how much you would need to pay each month in order to pay off your balance in three years. These numbers could act as a wake-up call for you to increase your monthly payments.

I like to say I used to behave like a financial ostrich, burying my head in the sand instead of facing my debt head-on. The very first step towards getting out of debt is to take inventory of where you stand. Obviously, it’s hard to do that if you ignore your statements.

You’ve probably noticed this in other people, or yourself, but it seems like very few people can tell you how much you owe. I used to say, “I owe a few thousand” and I hear others say, “I guess I owe around $10,000” (when they actually owe more like $13,500). To put together a good plan to get out of debt, you have to first know what you’re facing.

There are other good reasons to check your credit card statements, even if you regularly pay yours off every month (as I now do).

Mistakes happen. A merchant may inadvertently charge you twice for the same transaction. Issuers have also been known to get their wires crossed and post a charge to the wrong account if a batch processing file gets scrambled.

Fraud happens. The waiter that took your card last month at your favorite restaurant might have given himself a $111 tip instead of an $11 tip by simply adding a “1” to the front of your tip total on the receipt. Trust me, it happens. I used to see these kinds of things all the time when I worked in a credit card fraud and disputes area.

For more tips, be sure to check out the full article at


  1. I always check my monthly statements, but it is pretty easy since I am trying not to purchase much with my credit cards any more. Of course, I still have to work on decreasing that balance.

  2. Yep, the old balance transfer trap. Of course, if you just move balances from card to card, and the savings outweighs the fee, then it can work. But only if you don’t keep charging, or don’t miss payments, otherwise the debt will just keep growing…

  3. Credit – especially credit cards, only raise your cost of living. It’s best to avoid them as much as possible or pay them off each month. Of course, easier said than done 90% of the time.

  4. Having dug myself out of a mess 4 years ago I’m disinclined to succumb to the CC trap again. We use ours sparingly and pay the balance in full each month. We find it’s better to have an EF if the need arises. A change in attitude about having to have desired items right now instead of waiting until cash is in hand works just fine for me. It sure is less sressful. 🙂

  5. When I was younger and less responsible, I would rarely check my monthly statements. I get sick thinking of how many incorrect charges I may have paid for and never knew about it. Not to mention the lack of financial responsibility and clarity of how much you actually owe when you fail to monitor. The mistakes of an amateur, live and learn.

  6. I had a very bad experience with credit card and that is the reason why today i have no credit card in my pocket. At times it is quite frustrating because i had habit of making payment by my card but now i pay cash and believe me it gives me such a piece of mind as i do not have to worry about credit card risks such as fraud, higher interest rates, unpaid balance and so on.