1. Introductory Rates Trap: They offer low or 0% interest for a limited time, but rates spike after the promo period. Always check the regular APR before applying.
2. Late Payment Penalties: A single missed payment can trigger high penalty interest rates and fees. Set up automatic payments to avoid missing due dates.
3. Over-limit Fees: Some cards allow you to go over your credit limit but charge hefty fees for doing so. Monitor your balance to avoid exceeding the limit.
4. Complex Reward Systems: Rewards may have hidden limits or expiration dates, making it hard to fully benefit. Read the fine print on how and when rewards can be used.
5. Deferred Interest Offers: Interest-free deals may charge retroactive interest if the full balance isn’t paid off by the end of the promo. Pay off balances before the deadline to avoid this.
6. Minimum Payment Trap: Paying only the minimum extends your debt, leading to more interest paid over time. Always aim to pay more than the minimum.
To avoid these traps, read your card’s terms carefully and be proactive with payments.
