The average American household carries more than $8,284 in credit card debt alone. That’s more than enough to put anyone in a tight spot financially.
And for some, it’s reason enough to avoid getting a credit card in the first place. But doing so isn’t always in your best interest.
Instead, you need to focus on using your credit wisely. Here are a few simple credit card tips to help you keep your finances and your credit score in good shape.
1. Don’t Charge More Than You Can Afford
You should always use credit cards to complement your budget, not as a substitute. This means you shouldn’t rely on them to pay the bills and make ends meet if you have any other choice.
With this in mind, try to charge only what you know you can pay off at the end of the month. Use your budget to guide your spending and stick to it.
But what if you’ve overspent in the past and now have a bad credit score? Finding standard cards might not be an option. But this card will help you rebuild your credit score with a much lower interest rate than other cards.
2. Check Account Activity Weekly
Credit fraud happens all the time, but when you catch fraudulent activity fast, you reduce the damage. Get in the habit of checking your account every week.
Look for charges that you didn’t make. And sign up for spending alerts that notify you anytime a charge goes through. This lets you keep track of your account in real time.
If you notice anything suspicious or see a charge that you didn’t make, report it to your card issuer immediately. The sooner you report it, the less damage the thief can do.
3. Move Payment Dates If Needed
Did you know you can move your payment due date for many cards? This means you can tailor payments to line up with your paycheck.
If you find yourself struggling to make payments because you’re waiting on your next paycheck, contact the credit card company.
4. Maximize Rewards
Some credit cards earn rewards points on every dollar you spend. These rewards can be cash-back, discounts, and even credit towards a purchase with a certain company.
Make use of these rewards whenever possible. If you’re earning cash back on purchases, use that cash as a statement credit to decrease your bill. If you’re earning discounts with certain companies, use your card every time you use their services.
The more you make use of your rewards, the more money you’ll save.
5. Pay Off the Balance Each Month
Carrying a balance on your card hurts your credit score. But it also ends up costing you more money.
The credit card company charges interest on every cent you fail to pay off each month. If you max out your card, that could mean hundreds of dollars going to interest alone.
The only way to avoid those interest charges is to pay the balance off in full each month. If you find yourself carrying a balance, stop using the card and work on paying it off.
Once the balance is back to zero, you can start using the card again.
Use These Credit Card Tips
Credit cards are an excellent way to boost your credit score and improve your personal finances. But you do need to be careful when using them.
Never rely on your cards to make ends meet. And make sure to follow these credit card tips no matter what type of card you have.
Need more tips to help improve your finances? Check out our latest posts!