Credit Cards » Credit Card Guides » 19 Important Tips To Use Your Credit Card Wisely
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19 Important Tips To Use Your Credit Card Wisely

Using your credit card smartly can help you to gain a lot of rewards, stay away from debt and make your financial life easier. We've summarized 19 great tips for cardholders.
Author: Baruch Mann (Silvermann)
Baruch Mann (Silvermann)

Writer, Contributor

Experience

Baruch Silvermann is a financial expert, experienced analyst, and founder of The Smart Investor.  Silvermann has contributed to Yahoo Finance and cited as an authoritative source in financial outlets like Forbes, Business Insider, CNBC Select, CNET, Bankrate, Fox Business, The Street, and more.
Interest Rates Last Update: April 15, 2024
The banking product interest rates, including savings, CDs, and money market, are accurate as of this date.
Author: Baruch Mann (Silvermann)
Baruch Mann (Silvermann)

Writer, Contributor

Experience

Baruch Silvermann is a financial expert, experienced analyst, and founder of The Smart Investor.  Silvermann has contributed to Yahoo Finance and cited as an authoritative source in financial outlets like Forbes, Business Insider, CNBC Select, CNET, Bankrate, Fox Business, The Street, and more.
Interest Rates Last Update: April 15, 2024

The banking product interest rates, including savings, CDs, and money market, are accurate as of this date.

We earn a commission from our partner links on this page. It doesn't affect the integrity of our unbiased, independent editorial staff. Transparency is a core value for us, read our advertiser disclosure and how we make money.

Table Of Content

Credit cards make your life a whole lot easier by making it possible for you to travel without cash and, in some cases, entirely free. After all, you’re getting rewards just for buying things you would be buying anyway, right? They’re so easy!

When it comes to that credit card, you need to worry about your credit score, and that’s kind of like your health. You want to ensure you’re watching out for any signs of a problem, taking care of the score itself, and making the right choices.

You’re also going to see that your credit score can hurt. It can bring about debt problems, which means you need to pay close attention to what you’re doing.

The Benefits of Using Your Card Wisely

According to Experian data, the average credit score for United States residents was 714 across all age groups. In the table below you can see a breakdown per age:

 

The advantages of having good credit can range from lower credit card rates to lower car insurance premiums. Because credit scores are based on data in your credit reports, a higher score indicates good credit, which can be the key to enjoying these advantages:

When you apply for a credit card, the card issuer will most likely run a credit check. If you are approved, a good credit score may qualify you for benefits such as a lower annual percentage rate (APR).

Most states in the United States allow credit-based insurance scoring, which allows insurance companies to assess your risk based on how well you manage your money.

Various other factors are considered when determining your rates, and insurance companies do not solely rely on your credit score during the underwriting process. Getting the cheapest car insurance rates can save you hundreds every year.

You've just learned how good credit can help you qualify for lower credit card interest rates. It may also assist you in obtaining a higher credit limit on your credit cards.

 A higher credit score opens the door to a wider range of credit cards, in addition to a higher credit limit. For approval, many of the best rewards programs require excellent credit.

This includes travel rewards cards, which can be used to fully fund your vacations, as well as cash-back rewards cards, which earn a percentage of your spending back.

If you ever need a personal loan to buy a car, remodel your home, or start a business, having a good credit rating will qualify you for lower rates and apply for the best personal loans for good credit.

Besides lower interest, you can also use it as a bargaining chip during the mortgage negotiation process.

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Amex gold

Rewards Plan:
1X – 4X 4X points at restaurants (including Uber Eats purchases in the U.S.) and U.S. supermarkets (up to $25,000 per year in purchases, then 1X points), 3X points on flights booked directly with airlines or on amextravel.com, 2X points on rental cars through amextravel.com and 1X points on all other purchases
Welcome Bonus:
60,000 points 60,000 Membership Rewards® Points after you spend $6,000 on eligible purchases with your new Card within the first 6 months of Card Membership

upgrade cash rewards

Rewards Plan:
1.5% 1.5% cash back on payments
Welcome Bonus:
$200 Earn a $200 bonus after you open & fund a Rewards Checking Plus account & make 3 debit card transactions within 60 days. If you previously opened a checking account through Upgrade or do not do so as part of this process, you are not eligible. Payout made within 60 days of meeting the conditions.

AMEX Blue Cash Preferred Card review

Rewards Plan:
1-6% 6% cash back at U.S. supermarkets (up to $6,000 per year in purchases, then 1%) and selected U.S. streaming subscriptions, 3% cash back on transit and U.S. gas stations, 1% cash back on other purchases
Welcome Bonus:
$250 $250 statement credit after you spend $3,000 in purchases on your new Card within the first 6 months
Advertiser Disclosure
The product offers that appear on this site are from companies from which this website receives compensation.
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Amex gold

Rewards Plan:
1X – 4X 4X points at restaurants (including Uber Eats purchases in the U.S.) and U.S. supermarkets (up to $25,000 per year in purchases, then 1X points), 3X points on flights booked directly with airlines or on amextravel.com, 2X points on rental cars through amextravel.com and 1X points on all other purchases
Welcome Bonus:
60,000 points 60,000 Membership Rewards® Points after you spend $6,000 on eligible purchases with your new Card within the first 6 months of Card Membership

upgrade cash rewards

Rewards Plan:
1.5% 1.5% cash back on payments
Welcome Bonus:
$200 Earn a $200 bonus after you open & fund a Rewards Checking Plus account & make 3 debit card transactions within 60 days. If you previously opened a checking account through Upgrade or do not do so as part of this process, you are not eligible. Payout made within 60 days of meeting the conditions.

AMEX Blue Cash Preferred Card review

Rewards Plan:
1-6% 6% cash back at U.S. supermarkets (up to $6,000 per year in purchases, then 1%) and selected U.S. streaming subscriptions, 3% cash back on transit and U.S. gas stations, 1% cash back on other purchases
Welcome Bonus:
$250 $250 statement credit after you spend $3,000 in purchases on your new Card within the first 6 months
Advertiser Disclosure
The product offers that appear on this site are from companies from which this website receives compensation.

There are smart ways to use a credit card so that it is beneficial to you. You can use your credit card to build your credit and/or restructure your debt paying the minimal amount of interest.

We’re going to go over a total of 19 different things that you could be doing to help you make the right decisions about your credit cards.

1. Make Sure You Can Pay It Off

If you’ve ever seen a college student end up making a lot of charges on their credit card, assuming that eventually, they’ll make enough to pay it off, you’ve seen the problem with this one. Students end up in more debt than they know how to deal with.

Even thousands of dollars, and that can affect credit scores dramatically. That’s because the debt load that you carry is responsible for 30% of the credit score that you get. If you’re charging a lot of things and not paying them off at the end of the month, you will have a bad credit score to start yourself out with.

You want to ensure that no matter what else you’re doing, you only charge items you can afford to pay off that same month.

This will ensure that you don’t increase your credit score, but it’s only really going to happen if you know how much you’re spending and that you aren’t going over your self-imposed limits.

In this chart using data from Urban Institute, you can see that the age group 43 to 47 carries the highest average credit card debt. This age group has almost double the credit card debt of their under 32 year old counterparts or seniors aged 68+.

 

2. Choose Your Card Right

You may think that getting one credit card is the same as getting any other, but that’s actually not the case at all. You want to look at where you tend to buy with your credit card and then get a card that’s going to give you the most benefits for that type of spending.

If you use it everywhere you go then a general-purpose card might be the best option. If you use it only on Macy's you might want a Macy's card that gives you more benefits for those purchases. If you spend it on travel then a travel rewards card is a good idea, and so on.

3. Make the Payments Automatic

Automatic payments will ensure you don’t forget when that payment is due.

You can set these up directly through your bank and the credit company. That way, your payment gets automatically deducted every month, and you can continue your life as you have been. You don’t have to worry about the day your payment is due other than to ensure the money is in your account.

These can be great because they will make it practically impossible for your payment to be late. That means you won’t have to worry about the charges that get tacked on when you have a late payment. And you’ll have no problem keeping track of the payments because your bank is doing all of it for you.

4. Get Frequent Alerts

There are actually alert options with just about any type of credit card that will let you decide when you want to know what’s going on. These alerts can tell you about large purchase amounts or about when you’re getting close to a set percentage limit that you want to set.

Some of them are pre-set by the company and some are all about whatever you want to say about them.

5. Get the Most with Credit Card Rewards

Rewards cards are a great idea if you’re already using a credit card to pay for everything. These cards are going to help you get something back for the purchases you’re making, and that could be cash, retail points, airline miles, or a number of other things.

If you’re the type of person who is getting the maximum number of points from making purchases and then using those points for the things that you would buy anyway, then you’re definitely making the most out of this game, and you’re going to be getting the best results overall. That’s definitely going to be a good bonus.

Of course, you need to ensure that you’re paying off the card in full every month or you’re not going to be making much of anything. Adding a whole lot of interest on top of your charges is only going to serve to put you further and further in debt and you’re not going to be getting a benefit out of the rewards that you’ve earned.

Card
Rewards
Bonus
Annual Fee

Chase Freedom Flex

Chase Freedom Flex℠ Card
1-5% 5% cash back on up to $1,500 in combined purchases on selected categories each quarter and 5% cash back on travel purchased through Chase Ultimate Rewards®. Also, you can earn 3% cash back on dining at restaurants (including takeout and eligible delivery services), drugstore purchases , and 1% on all other purchases
$200 $200 bonus after you spend $500 on purchases in the first 3 months from account opening
$0

Capital One Savor Cash Rewards Credit Card
1% – 4% unlimited 4% cash back on dining, entertainment, and popular streaming services, 3% at grocery stores and 1% on all other purchases.
$300 $300 cash bonus once you spend $3,000 on purchases within 3 months from account opening
$95

AMEX Blue Cash Preferred Card review

Blue Cash Preferred® Card from American Express
1-6% 6% cash back at U.S. supermarkets (up to $6,000 per year in purchases, then 1%) and selected U.S. streaming subscriptions, 3% cash back on transit and U.S. gas stations, 1% cash back on other purchases
$250 $250 statement credit after you spend $3,000 in purchases on your new Card within the first 6 months
$95 ($0 intro for the first year), Rates & Fees

Citi-costco-anywhere-visa-credit-card review

Costco Anywhere Visa® Card by Citi
1-4% 4% cash back on on eligible gas and EV charging purchases for the first $7,000 per year and then 1% thereafter, 3% cash back on restaurants and most travel purchases, 2% cash back at Costco and Costco.com, 1% cash back on all other purchases
None
$0 ($60 Costco membership fee required)

citi double cash

Citi® Double Cash Card
1% – 2% 2% cash back rewards rate – 1% every time you swipe and another 1% upon payment.
$200 $200 cash back after you spend $1,500 on purchases in the first 6 months of account opening
$0

Discover it® Cash Back
1-5% 5% cashback on up to $1,500 in rotating category purchases each quarter when you activate the bonus category (then 1%), as well 1% percent cash back on all other purchases
Cashback Match All cash back earned at the end of the first 12 months is matched.
$0

6. Don’t Cancel Your Old Credit Cards

Keeping credit cards open without a balance will be a great idea. That means when you manage to pay off that credit card, you want to ensure that you’re still leaving it open and letting it improve your credit utilization.

Another thing that it’s going to do is increase your age of credit history. If you have older cards, especially, you want to make sure you keep them open because they’ll make that history longer, which will increase your credit score a little bit more. If you close that card, your history gets shorter on average, and your score could decrease.

Back to that credit utilization, you have less available credit when you close an account. That means, by default, the amount of credit you’ve spent is now a higher percentage, which will decrease your score.

Now, on the other hand, if you have a card that you’re not using that has a $0 balance and that’s charging you an annual fee, that might be the one time you do want to close the account. After all, you don’t want to be paying for a card you’re not even getting anything out of, right?

7. Don't Keep Too Many Cards

We’re all tempted by new credit cards every single day because they’re absolutely everywhere. But you don’t want to get new credit cards all the time. They can make it really hard for you to keep track of payments and amounts due and they can definitely increase your chances of actually getting into a lot of debt. For those who are just getting started with debt and credit cards especially they can be a really bad idea.

You want to keep yourself limited to just one or two credit cards instead of really going all out and bringing in a whole lot of cards at once. After all, you’re still getting into the swing of things.

8. Lower Your Utilization

You never want to max out the credit that’s available to you.

If you have a lot of debt and a high balance it’s going to decrease your credit score and that happens as soon as you get over 30-50% credit utilization. You could end up with a lower score and higher interest rates on anything that you have if your utilization starts getting too high.

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Welcome Bonus:
80,000 points 80,000 Membership Rewards® points after you spend $8,000 on purchases on your new Card in your first 6 months of Card Membership

amex brilliant

Rewards Plan:
2X – 6X 6 Marriott Bonvoy points for each dollar of eligible purchases at hotels participating in the Marriott Bonvoy™ program, 3 points at Worldwide restaurants and on flights booked directly with airlines and 2 points on all other eligible purchases
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Amex Delta SkyMiles Platinum card

Rewards Plan:
1X – 3X 3X Miles on Delta purchases and purchases made directly with hotels, 2X Miles at restaurants worldwide including takeout and delivery in the U.S., and at U.S. supermarkets and 1X Miles on all other eligible purchases
Welcome Bonus:
50,000 miles 50,000 bonus miles after you spend $3,000 in your first six months
Advertiser Disclosure
The product offers that appear on this site are from companies from which this website receives compensation.
Top Offers From Our Partners

amex platinum

Rewards Plan:
1X – 5X 5X points on up to $500,000 spent on directly-booked airfare and flights and prepaid hotels booked through American Express Travel (per calendar year), 2X points on prepaid car rentals through American Express Travel and 1X points on all other purchases
Welcome Bonus:
80,000 points 80,000 Membership Rewards® points after you spend $8,000 on purchases on your new Card in your first 6 months of Card Membership

amex brilliant

Rewards Plan:
2X – 6X 6 Marriott Bonvoy points for each dollar of eligible purchases at hotels participating in the Marriott Bonvoy™ program, 3 points at Worldwide restaurants and on flights booked directly with airlines and 2 points on all other eligible purchases
Welcome Bonus:
95,000 points 95,000 Marriott Bonvoy bonus points after you use your new Card to make $6,000 in purchases within the first 6 months of Card Membership

Amex Delta SkyMiles Platinum card

Rewards Plan:
Up to 3x miles 3 miles per $1 spent on United purchases immediately after earning your $125 annual United purchase credit, 2 miles on all other travel and select streaming services, 1 mile on all other purchases
Welcome Bonus:
60,000 miles 60,000 bonus miles + 500 Premier qualifying points (PQP) after you spend $4,000 on purchases in the first 3 months your account is open.
Advertiser Disclosure
The product offers that appear on this site are from companies from which this website receives compensation.

9. Watch for Fees

One of the biggest ways that any credit card company is going to get money is by charging you fees. In fact, research shows that these companies have made over 12B dollars only on late payments. And they get these fees in several different ways. And they’re not about to change that fact. They want to keep increasing their earnings.

So, you want to look at annual fees and avoid these types of cards. If you can’t avoid a card with an annual fee, see if you can get it waived or even reduced. Just asking the question could be enough to get you these perks and you’re never going to know unless you ask them about it.

When choosing a credit card, one of the things you need to consider is the free structure. In this chart compiled with creditcards.com data, we can see that late payment fees are the most common type of fee. This is followed by cash advance fees. At the other end of the scale, we can now see that over limit fees and annual fees are far less common. This highlights the importance of making payments on time, which can not only save on fees but help you to establish a solid credit history.

 

10. Make the Most of Sign-On Bonuses

Because there are so many different credit card companies out there it’s super difficult for a company to draw in the business that they want. So, they’re willing to give you some different bonuses for signing up for their credit card. In fact, just about any credit card that you sign up for is going to give you a great bonus for doing so.

If you’re going to be signing up for a card anyway, there’s definitely no reason you should do it without getting a bonus out of the deal.

Look at all the different ways you can take advantage of those bonuses, and then make sure that you’re using your card the right way. You don’t want to counter that bonus by ending up in debt.

Make sure you can reach the bonus level, though, as most of these cards have requirements to get that bonus.

11. Use a Secured Credit Card to Build Your Credit

Secured credit cards are a great way to get your credit portfolio started without having to get a standard credit card.

After all, if you don’t have credit yet these can be difficult to get. You want to make sure you’re making payments on time and that you’re using the card responsibly when you get this card and you’ll be able to upgrade it before long.

12. Skip the Cash Advance

Your credit card is not an ATM. That means you should not be taking cash out of the card that you can use whenever you want. This is called a cash advance and it’s actually extremely expensive.

They have a lot of fees and they start charging interest from the moment you click ‘accept’ on the screen. That means you’re going to be charged high amounts for that money.

Card
Cash Advance Fee
Cash Advance Interest Rate
freedom_unlimited_card_alt
Chase Freedom Unlimited®
$10 or 5%, whichever is greater.
24.99%

chase_sapphire_preffered

Chase Sapphire Preferred® Card
$10 or 5%, whichever is greater.
25.74% Variable

Citi-costco-anywhere-visa-credit-card review

Costco Anywhere Visa® Card by Citi
$10 or 5%, whichever is greater.
28.99% Variable

AMEX Blue Cash Preferred Card review

Blue Cash Preferred® Card from American Express
$10 or 5%, whichever is greater.
28.99% Variable
Amex-Blue-Cash-everyday
Blue Cash Everyday® Card from American Express
$10 or 5%, whichever is greater.
28.99% Variable

capital-one-venture

Capital One Venture Rewards Credit Card
$10 or 3%, whichever is greater.
24.90% Variable

Discover it® Cash Back
$10 or 5%, whichever is greater.
27.99% variable

OpenSky® Secured Visa® Credit Card

OpenSky® Secured Visa® Credit Card
$6 or 5%, whichever is greater.
20.39% Variable

Wells Fargo ReflectSM Card (1)

Wells Fargo Reflect® Card
$10 or 5%, whichever is greater.
29.74% Variable

13. Use the Grace Period

When your statement is closed out and then when the payment for the month is due is generally a period of time between 21 and 25 days. For those who pay their balance completely before the bill is due it actually helps you stay away from interest and that means paying within that grace period. You just need to make sure that you’re making the most of the period of time you have available.

If you make a purchase at the beginning of a statement period you’re actually going to have a total of 51-55 days to pay it off rather than that 21 to 25 days. That’s going to give you almost a full two months to make the payments and get rid of that charge entirely.

You want to know all about the different ways you can maximize the period of time you have between actually making the charge and then being able to pay it off. That’s going to make things a whole lot more convenient for you.

14. Track Your Spending

Your credit card or bank may actually have a spending analysis tool. This is a little tool online that lets you see what kind of money you’re spending and on what. So, you can see how much you spent the last month on restaurants or travel or clothing. You can even take a look at longer periods of time and check out your general spending habits to find out more.

You want to take a look at this because it’s going to show you where your problem areas are and where you’re doing okay with sticking to your budget. It will also help you with the process of actually creating that budget in the first place.

15. Protect Yourself

Shopping online is fun, but you want to make sure that you’re being careful about it. You don’t want anyone to get your personal information and that means making sure that you’re frequently making changes to your login information.

You also want to make sure that you’re not writing down the information that you’ve used and if you absolutely have to make sure that the information is locked up. You’ll also want to keep from saving your login information in your phone or anywhere else. These things make it far too easy for a hacker to get into your information and make changes you didn’t want.

16. Monitor Your Credit Report

There are three different credit bureaus that are actually creating your credit report. These are TransUnion, Experian and Equifax. You want to make sure that these three organizations, which help to create your credit score, are reporting everything accurately. Lenders are relying on them for their information and to decide if you’re actually a good risk for them to make.

In your report is everything about your credit history including how much you owe, the types of credit you have, how many times you’ve applied for any type of credit in the last two years, if you’re making on time payments and a whole lot more. If the information isn’t right you could get denied for some form of credit that you really need. In such a case, you'll need to fix the errors on your credit report.

You want to take a closer look at the report you have at least yearly and actually you can get one of each of the reports once a year.

That means you can actually check your credit report every four months to find out more. You just need to go to annualcreditreport.com to find out more and get the copies that you need for your review.

17. Don’t Apply for the Heck of It

It can be tempting to apply for a lot of credit because you feel like it’s going to help you get better credit quickly. That’s absolutely not the case. When you get prescreened for a type of credit that doesn’t hurt your account.

On the other hand, if you’re applying for actual credit you’re going to get what’s called a hard inquiry. These are actually going to affect your credit score and too many of them is going to affect your credit score by a lot.

In fact, inquiries are 10% of the total makeup of your credit score. If you’ve been applying for too many things that 10% is going to reflect badly and you could end up getting denied for something that you really wanted or needed.

18. Don’t Make Late Payments

This one should be obvious, but you want to make sure that you’re making all of your payments on time. If you’re late you’re going to incur penalties and interest and some bad marks on your credit report. Those bad marks are all going to affect your credit score, and that’s not something you’re going to want.

For those who have trouble remembering their dates and the times that your credit payments are due you can either set a reminder to let you know beforehand or you can set up automatic payments that will take care of everything for you.

19. Increase Your Credit Score

Your credit card is going to improve your credit score and help you to get the credit you’re looking for, if you know how to take care of it properly. Make sure that you are looking at the different options and that you’re paying attention to all of the different factors associated with your credit card. You can absolutely change the way you get credit based on where you are in the cycle.

If you’ve had no credit before you could go secured. Otherwise, a co-signed card might be a good option.

Top Offers

Amex gold

Rewards Plan:
1X – 4X 4X points at restaurants (including Uber Eats purchases in the U.S.) and U.S. supermarkets (up to $25,000 per year in purchases, then 1X points), 3X points on flights booked directly with airlines or on amextravel.com, 2X points on rental cars through amextravel.com and 1X points on all other purchases
Welcome Bonus:
60,000 points 60,000 Membership Rewards® Points after you spend $6,000 on eligible purchases with your new Card within the first 6 months of Card Membership

hilton honors card

Rewards Plan:
3X – 7X 7X Hilton Honors Bonus Points for each dollar of eligible purchases charged directly with hotels and resorts within the Hilton portfolio, 5x points at U.S. restaurants (including takeout and delivery) U.S.supermarkets, U.S. gas stations and 3x points for each dollar on other eligible purchases
Welcome Bonus:
70,000 points 70,000 Hilton Honors Bonus Points after you spend $2,000 in purchases on the Card in the first 6 months of Card Membership

Marriot bonvoy bevy card art

Rewards Plan:
2x – 6x 6X points on purchases at hotels participating in Marriott Bonvoy, 4X points at restaurants worldwide (including takeout and delivery in the U.S.) and U.S. supermarkets (up to $15,000 in combined purchases per year, then 2X points), 2X points on all other purchases
Welcome Bonus:
85,000 points 85,000 Marriott Bonvoy bonus points after you use your new Card to make $5,000 in purchases within the first 6 months of Card Membership
Advertiser Disclosure
The product offers that appear on this site are from companies from which this website receives compensation.
Top Offers From Our Partners

Amex gold

Rewards Plan:
1X – 4X 4X points at restaurants (including Uber Eats purchases in the U.S.) and U.S. supermarkets (up to $25,000 per year in purchases, then 1X points), 3X points on flights booked directly with airlines or on amextravel.com, 2X points on rental cars through amextravel.com and 1X points on all other purchases
Welcome Bonus:
60,000 points 60,000 Membership Rewards® Points after you spend $6,000 on eligible purchases with your new Card within the first 6 months of Card Membership

hilton honors card

Rewards Plan:
3X – 7X 7X Hilton Honors Bonus Points for each dollar of eligible purchases charged directly with hotels and resorts within the Hilton portfolio, 5x points at U.S. restaurants (including takeout and delivery) U.S.supermarkets, U.S. gas stations and 3x points for each dollar on other eligible purchases
Welcome Bonus:
70,000 points 70,000 Hilton Honors Bonus Points after you spend $2,000 in purchases on the Card in the first 6 months of Card Membership

Marriot bonvoy bevy card art

Rewards Plan:
2x – 6x 6X points on purchases at hotels participating in Marriott Bonvoy, 4X points at restaurants worldwide (including takeout and delivery in the U.S.) and U.S. supermarkets (up to $15,000 in combined purchases per year, then 2X points), 2X points on all other purchases
Welcome Bonus:
85,000 points 85,000 Marriott Bonvoy bonus points after you use your new Card to make $5,000 in purchases within the first 6 months of Card Membership
Advertiser Disclosure
The product offers that appear on this site are from companies from which this website receives compensation.

FAQs

If you’re looking to build your credit, it is possible to use a credit card, but you will need to take a very proactive approach. Each time you make a payment on your credit card account, it will be reported to the credit bureaus, which can boost your score.

However, the most effective way is to maintain a credit utilization ratio of less than 30 percent. So, if your card has a $1,000 limit, be sure to keep the account balance at less than $300.

If you want to minimize interest costs, aim to repay the full account balance with each statement. This will ensure that you pay no interest and the payment will still be recorded on your credit report.

If you want to properly manage your credit card, you need to ensure that you remain on top of your statement each and every month. When your statement is generated, there is a grace period where no interest is added to your account.

So, if you are able, aim to repay the entire card balance every month. If this is not possible, try to pay over the minimum payment. The minimum monthly payment covers the interest charges and a little of the outstanding balance. This means that if you only ever pay the monthly minimum, you will be carrying this debt for years.

It is also a good idea to create a note in your calendar of your card statement dates. Many credit card companies allow you to manage your account online, so if your statement does not arrive in time or goes missing in the post, you can still make your payments on time.

There are some circumstances when using your credit card is a good idea. Credit cards typically offer greater purchase protection, so if an item is damaged or faulty, even if you cannot get recourse with the retailer, you’ll be covered.

However, you should only use your credit card if you have a plan for how you will repay the account. Simply putting purchases on your credit card to think about paying later is the quickest way to get into serious debt.

Picture of Baruch Mann (Silvermann)

Baruch Mann (Silvermann)

Baruch Silvermann is a financial expert, experienced analyst, and founder of The Smart Investor.  Silvermann has contributed to Yahoo Finance and cited as an authoritative source in financial outlets like Forbes, Business Insider, CNBC Select, CNET, Bankrate, Fox Business, The Street, and more.
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Annual Fee:
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Advertiser Disclosure
The product offers that appear on this site are from companies from which this website receives compensation.

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