How to Start Using a Credit Card Wisely

Credit cards are a bit of a mixed bag.

They come with the temptation to overspend and wrack up consumer debt, but they are also a convenient way to pay, earn rewards, and build up your credit score.

You are ready to begin using credit cards as soon as you feel like you can do so responsibly. Here are three tips for wise credit card use.

Maximize Your Rewards Points

The first step is to find a credit card with the rewards that are most meaningful to you.

This could be a travel card, a dining or entertainment credit card, a merchant’s rewards card, or even one that offers cash back.

The best rewards cards come with no annual fees but if you do select a credit card with fees, be sure that your earnings will exceed the fee by enough to make it worth it for you.

Many cards offer up to 10 times the points when you make purchases from certified merchants or book travel through a sister company.

You can also maximize your rewards by putting all of your purchases on one card. 

Increase Your Credit Score

Opening a line of credit is vital to building your credit score.

You can maintain your credit score by paying your bills on time, limiting the number of credit cards you apply for, and paying off your debts as quickly as possible.

It’s a good idea to open a credit card when you are young, as long as you can use it wisely. The length of your credit history makes up 15% of your credit score.

Think of Your Credit Card as a Debit Card

Swiping a card is so easy and convenient, it’s far too easy to lose track of your expenditures and go over your monthly budget.

Instead of mindlessly swiping your card and hoping for the best each month, keep track of your credit card expenditures like you would a bank card.

It may sound old-fashioned, but the best way to keep from overspending is to create a budget and track every expense. You might even want to get in the habit of paying your credit card balance weekly. 

It’s hard to get very far in today’s world without at least one credit card. They can be used all over the world, to make online purchases, and to help build your credit score.

However, your financial security depends on your ability to use your credit cards wisely. 

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