There are two kinds of credit card advice. What you will most commonly hear are smart recommendations for how to use your credit card. These tips typically include ways to minimize your debt and maximize your rewards while avoiding fees. And while these can be valuable suggestions, some people ignore them and continue to use their credit cards, however imperfectly.
But there is another type of advice that goes beyond mere suggestions and is more like a large, flashing warning sign.
Here are three things that you shouldn’t even consider doing with your credit card.
1. Ignore Your Statements
When you are unable to control your spending, it can be very painful to open up your statement and see the list of charges staring at you, along with the balance and minimum payment. So in response, some people will put these unopened envelopes in a pile, in the hopes that the problem will just go away if they ignore it.
But doing this will only multiply their problems, and it will do so very quickly. After one missed payment, cardholders will merely be facing costly late fees and penalty interest charges. But after two missed payments, it’s likely that their charging privileges will be suspended and their late payments will be reported to the consumer credit bureaus, which will severely damage their credit. And continued non-payment can result in repeated collection calls, emails and letters. Ultimately, this can lead to legal action that can result in a judgment, and possibly even garnishment of your wages. To avoid all of this, make sure that you read each statement, and do you best to at least make the minimum payment each month, and preferably much more. And if that is not possible, be sure to contact the card issuer as soon as possible to inform them and to try to work out a solution.
2. Use a Credit Card Without Permission
Have you ever discovered a misplaced credit card, or one that the owner wouldn’t notice if it went missing? For some people, it might be tempting to “borrow” it for a little while, and make a few charges. Such a person might even rationalize that cardholder will simply report those charges as fraudulent, and conclude that no one will get hurt.
Nevertheless, credit card fraud is a serious crime, and it’s a line you should never cross. Not only will you become a criminal, but you also have an excellent chance of being caught, as your identity could be documented in so many ways ranging from security cameras in the store, a telephone number used to make purchases over the phone, or even by the Internet address used by your computer when you make charges online. The laws you break will vary based on the state the crime occurs in, and may include jail time. And if your transaction crosses state lines, or happens to occur on government property, then even harsher federal criminal statutes can apply.
3. Buy or Sell Credit Card Rewards
Some people earn so many points or miles they don’t know what to do with them, and they may attempt to sell them. While this practice is not illegal, it violates the terms and conditions of nearly every airline, hotel and credit card rewards program. These companies can aggressively pursue people that they believe have bought or sold rewards, and their penalties can include canceling travel reservations, and confiscating remaining balances of points and miles.
And even when you try to buy someone else’s credit card rewards, such as an airline ticket, the consequences can also be devastating. First, these types of grey market sales are ripe for fraud, and you will have very little assurance that you will actually receive a valid airline or hotel reservation in return for the cash you pay. And even when you are dealing with an honest broker, the travel provider may still end up canceling your reservation if it suspects that you’ve paid for the award ticket. Should this happen to you before your return flight from a faraway land, you will wish you had never considered buying a frequent-flier award ticket.
There are lots of things you shouldn’t do with your credit card, but one thing you definitely should do is check your credit before you apply for a credit card. Your credit score will play a major role in whether you can qualify for some of the most attractive credit cards on the market. You can check your credit scores for free on Credit.com to see where you stand.
This article originally appeared on Credit.com and was written by Jason Steele.
