We can probably all agree – credit cards are a convenient and sometimes rewarding way to make purchases but they do need to be handled with care.
Paying with credit is generally safer than using cash or debit. Plus, if you’re using your cards responsibly, you are building a good credit history. The basics are simple:
- Buy something with your card
- Earn rewards on your purchases
- Pay your bill in full when it comes in to avoid interest charges
Sounds easy but here are some tried and true tips to manage your credit cards.
- Use Balance Alerts
It’s very easy to lose track of your spending when paying by credit card. Typically, you can set up balance alerts to receive text notifications that your balance is approaching a certain level (that you set). You could set an alert for when your balance approaches, say, $500, or for an amount that equals 30% of your credit limit.
- Stay Under 30%
Keeping your credit utilization ratio under 30% keeps your credit score healthy. Your credit utilization ratio is the total available credit that you are using. For example, if your limit is $1,000, you should keep your balance under $300. This ratio applies to the combination of all of your card limits.
- Pay Off Your Balance Each Month
You save money on interest when you pay your balance in full each month. So, resist the temptation to spend more than you can afford to pay each month.
- Move Your Due Date if Needed
We all know that missing a payment or paying late dings your credit history plus you may get hit with a late payment fee! If your due date falls at a bad time in your monthly budget, ask your card issuer if you can change the due date rather than make a late payment.
- Use it as a Budgeting Tool
If you are confident you can pay off the card balance each month, a credit card is a great way to track your purchases and see where you’ve spent your money. Most card issuers have tools to show you how much you’ve spent on your card in various categories so you can easily see where you are hitting (and missing) your budgeting goals.
- Find a Rewards Card
If you are using your card for your day-to-day purchases, why not use a card that offers rewards for travel, merchandise, airline miles, or even cash? Getting rewards sweetens the deal for you, especially if you pay your balance in full each month.
If you’re looking for a great card with a low rate and lots of perks, look no further than Members Trust. Click to learn more.