I confess that I’ve fallen prey to many of the most common credit card problems. Luckily, most of those issues were a long time ago and I’ve learned from my mistakes. Hopefully, you can avoid problems like this yourself. However, if you can’t, then at least you can learn how to solve them.
First, Learn All of the Details
You can avoid most common credit card problems if you get to know the terms of your card inside and out. For example, very early on in my credit-building, I made the mistake of not paying attention to the annual fee. This is an obvious, rookie mistake. Most people don’t need credit cards with an annual fee. Newbies definitely do not. Yet I signed up for a card that sounded great and cost me a fortune. I didn’t cancel it right away either, so I paid that fee for several years before I got wise.
You want to look at other details including:
- The interest rate and what factors might cause it to change
- Transaction fees including balance transfers and cash advances; you don’t want to pay a lot of money just to borrow money
- Penalty charges such as late payment and over-limit fees
- Protections because you can get a lot from a card if you know how to use it right
- Rewards, how to take advantage of them, and what the limitations are
For example, don’t make the mistake of allowing rewards points to accrue if you’re required to use them within a certain time frame. You should read all terms of the agreement before accepting a credit card. You should review them again once you get the card but before using it. Then you should review it annually to make sure that the terms are still the same – and that they’re the best ones you can get.
Declined Cards are Among Most Common Credit Card Problems
A business declines your credit card. It’s frustrating. It may also be embarrassing. However, it happens to most people at some point. Here are some of the most common reasons:
- You haven’t paid the bill. If you made a late payment, then it might not have processed yet. Avoid this issue by setting up automatic payments.
- There isn’t enough credit. Avoid this issue by never running close to the limit on your available balance.
- Your account is closed and/or your card has expired. Check the expiration date. Don’t rely on your credit card company to send a new card in time. Instead, keep track of when you should receive a new card and contact them if your expiration date is near.
- Your activity looks suspicious. Many credit cards have a fraud protection feature that will stop the card from use until you confirm that you’re the purchaser. This often happens when you travel or when you make large purchases. Call your credit card company in advance to let them know about those plans.
What to do if Your Credit Card Is Declined
If your credit card gets declined, the first thing to do is to ask them to run it again. In particular, ask them to enter the number manually, in case there is a problem with the chip or strip on the card. If it still doesn’t work, use another payment method. Carry cash on you in case of such emergencies. Alternatively, have a backup such as Apple Pay. Then, once you’ve left the situation, call the credit card company to find out what is going on and resolve the issue.
Other Common Credit Card Problems
If you have read your terms of agreement, then you can avoid most credit card problems. For example, you shouldn’t have any unexpected late fees, unused rewards, or excessive interest rate payments. If you know how to handle it when your credit card gets declined, then you’re well on your way to handling most other issues. However, there are a few other common credit card problems to be aware of:
You sign up for too many credit cards.
Each time you sign up, you take a small ding on your credit score. Pace yourself.
Your card isn’t widely accepted.
For example, American Express is great, but a lot of places don’t accept it. Have at least one MasterCard or Visa at your disposal.
It isn’t accepted internationally.
Make sure that you’ve checked this important detail before traveling. If you often travel, get a card that doesn’t charge foreign transaction fees.
You don’t use your credit card enough.
You should have at least one credit card. Moreover, you should use it regularly. More importantly, you should pay it off monthly. This establishes good credit.
The rewards aren’t right for you.
If you don’t like to travel then miles aren’t a great reward. Likewise, if you rarely eat at restaurants, then a card that gives a huge percentage back for dining isn’t going to help you. Choose a card with the right rewards for your lifestyle. Cash back cards are usually a good choice. Make sure there are no fees or penalties for utilizing your rewards.
Of course, of all of the most common credit card problems, the biggest is a problem with spending. In other words, don’t live beyond your means just because credit cards allow you to do so. Spend only what you have.