Best Practices for Using a Credit Card

Credit cards are one of several payment choices available to you, and when managed carefully, they can help you develop or improve your credit score as well as help you earn rewards. If you're someone who is new to credit cards, spend a few minutes reviewing these best practices for credit card use.

Get the Right Card

The best way to use a credit card is to do your research and make sure to get the right one based on your needs and spending habits. Also, consider your priorities when it comes to rewards. For example, are you more interested in getting cash back or are you more interested in travel points? You should be able to apply only once after finding the right card that is the right fit for you.

Pay Your Balance Off in Full and On-Time

To also build your credit score while protecting your finances is by paying off what you owe on your credit card on time. Carrying over unpaid balances or making late payments on a regular basis will negatively impact your credit score and put you in a position where it would be difficult to pay off your debt.

Don’t Borrow Too Much at Once

When approved for a credit card, you will be given a credit limit. If you constantly get close to the maximum amount of the credit limit, you could be seen as a high-risk borrower by creditors. To avoid damage to your credit score, it’s best to keep your ratio under 30%.

Keep in mind that credit cards offer revolving credit, so don’t be afraid to use them. Pay off the amount borrowed, and borrow again! For more tips on credit cards and other financial topics check our financial literacy website, Banzai.