January 19, 2022

How to (Properly) Use a Credit Card

3 min read

Closeup shot of a woman passing a payment credit card to the seller. Girl holding a credit card. Shallow depth of field with focus on the credit card.

Do you have an understanding of how credit works? If you’re like most Americans, you probably don’t.

Studies show that as many as four in ten Americans have no idea how credit or their credit score works. Unfortunately, your credit score can significantly impact your financial well-being. Because of that, you need to know how to properly use a credit card.

To help make that easy, we’ve accumulated a list of tips for using a credit card. By the time you finish reading, you’ll be able to dive further into the world of credit without fear of wrecking your financial future.

Read on to learn more.

Make Payments on Time

No matter your credit limit, you need to remember to make your payments on time. If that means you need to turn on auto-payments, do it — you don’t want to have a poor payment history.

Creditors want to see that you’re a responsible borrower. Late payments signal to them that you’re not, and because of that, can harm your credit score.

Pay Back More Than the Minimum

It’s a good idea to pay at least the minimum required each month, as doing so helps you avoid late fees and other penalties. However, don’t hesitate to pay more than the minimum if you can.

When you carry a balance, you get charged interest. This ends up costing you more money in the long run.

Don’t Go Over Your Credit Limit

It should go without saying, but you want to always avoid going over or near your credit limit. In fact, if possible, you want to stay as far away from it as possible.

Your credit utilization ratio is another factor that impacts your credit score. Try to use no more than 30% of your credit to ensure that your score doesn’t take a hit.

Report a Missing Card Immediately

If your card goes missing or gets stolen, make sure to report it as soon as possible. Some card companies don’t offer protection for unauthorized charges. If something happens, you won’t be able to get your money back for fraudulent purchases.

The BMO eclipse Visa Infinite* Card is one example of a credit card that features some security measures. Learn more about it here!

Monitor Your Credit

Monitoring your credit is the best way to know whether or not you need to change any aspect of your credit usage habits. For example, if you find that you missed a payment, make it a priority to pay off your balance on time moving forward.

You want your credit score as high as possible!

Understand How to Properly Use a Credit Card

Whether you have five credit cards or are thinking of opening your first one, understanding how to properly use a credit card is never a bad idea.

Use this guide to help you do just that.

Are you looking to learn more about the best ways to use a credit card? If you are, make sure to check out the rest of our site for more great content.

Leave a Reply

Your email address will not be published. Required fields are marked *

Copyright © All rights reserved. | Newsphere by AF themes.