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Here are the worst credit card tips we found on Reddit

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Reddit users are quick to clear up misconceptions and lies.

Key points

  • Reddit users often have internalized myths or just plain bad credit card advice, and when they post about them, they usually get helpful advice instead.
  • It’s a bad idea to take cash advances or close credit card accounts if you can avoid it.
  • If you’re new to credit, you’ll probably have an easier time getting a secured credit card than an unsecured one.

Reddit is a fascinating place on the internet to get lost. There are so many subreddits (individual forums) on just about any topic you can imagine. Naturally, this extends to money matters. r/CreditCards is full of Reddit users with tons of credit card experience, and if you’re new to credit cards, this can be a great place to get tips and tricks — plus lots of do’s and don’ts.

I dug into r/CreditCards and found a few examples of credit card don’ts that Reddit users asked as questions in the forum. Other users were quick to offer the right tip, and I’ll talk about that here as well. Read on to learn the pitfalls of credit cards and how to avoid them.

“I will take a cash advance to invest.”

A Reddit user was specifically looking for a credit card that would allow him to withdraw $10,000 in the form of a cash advance so he could use that money to invest in I bonds. I’m reading can be a good investment (and especially this year, with high inflation), it is not a good idea to finance this investment with a cash advance. At the top of the list of things you really don’t want to do with a credit card is make a cash advance.

While that might not seem like a big deal (after all, you’re just using your credit card like a debit card to withdraw cash from an ATM), it can have big implications for your finances. Your credit card issuer will start charging you interest on a cash advance immediately, and usually at a higher percentage rate than your APR purchase. You will also be charged a cash advance fee, often in the amount of 3-5% of the amount of the advance. So even if a credit card offered a cash advance of $10,000, there would be a charge of $300 to $500 immediately. Finally, you will not earn rewards or cash back on a cash advance.

Cash advances are best avoided unless you are in dire need of a small amount of money and would go without (or need to resort to a payday loan, which is another bad idea).

“I want my first credit card to be this particular one.”

Another Reddit user asked for help getting his first credit card at 18 years old. They researched and identified a few cards to apply for and ultimately weren’t approved. While researching credit cards before applying for them and trying to find the right fit for you and your finances is a great financial deal, when you’re just starting out as an adult, it may not work for you.

Other Reddit users made suggestions, like applying for a student credit card, or try to get a card from some reputable issuers more friendly to young people new to credit. Others recommended a free credit monitoring service to help the poster master checking their credit reports, and some also suggested starting with one. secure credit card.

Secured credit cards are a great way for students to start using credit. Your card limit will be the amount of deposit you make with the issuer, and as you spend that money and repay the card (ideally, in full and on time) each month, you’ll build credit and may eventually be able to switch to an unsecured credit card. If you’re new to credit, don’t assume you’ll qualify for the card you care about. Start small and grow your credit.

“I got the wrong card and I want to cancel it.”

Finally, a Reddit user admitted that he accidentally ended up with the wrong credit card. They had tried to keep cards with one issuer and already knew that issuer’s rules about transferring money to travel points. Unfortunately, their new credit card was with a different company that has different rules. The poster wondered how to undo this new card, or even if it was a good idea. Other users noted that canceling the new card was not a good idea, for several reasons.

Opening a new credit card and abruptly canceling it soon after will likely set off red flags with a credit card company, as they are often susceptible to potentially fraudulent behavior. And if the Reddit poster wanted to open a different map with that issuer, it might struggle to get approved. Also, closing a credit card account often hurts your credit scorebecause you’re reducing both the average age of your accounts (okay, in this case the account was brand new) and your available credit limit.

Instead, it may be best for the Reddit user to keep the card account and use it for a small purchase or bill payment every few months so that the card’s history and the available credit limit continue to give their credit score a boost. If it was a card with an annual fee, they could contact the issuer and see the option of upgrading to a card with no annual fee so they don’t end up paying unnecessarily for a card they don’t do not plan to use often.

There are a lot of potential pitfalls with using credit cards. Luckily, Reddit is here to dispel any misconceptions users might have about them. Where else can you ask a question or make a complaint and get immediate help from anywhere in the world?

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