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Manage Your Credit Card so it Works for You

A credit card can be very convenient, and for some people can be a tool for flexibility in managing your finances. For first time credit card holders in particular, it can be easy to forget that a credit card is essentially borrowing money that you need to repay.
There are a few tactics you can use to ensure that you are managing your credit card – and it is not managing you!
  1. Before you even open a credit card, evaluate your options carefully. Choose a card that has low fees, low interest rates, and possibly even offers rewards.
  2. Set up automatic payments on your card. This will help you avoid fees, finance charges, or other negative effects to your credit score.
  3. Pay more than the minimum payment each month. If possible, pay the full balance each month.
  4. Avoid cash advances. Cash withdrawn on a credit card may have higher interest that is charged immediately.
  5. Keep your balance well below your credit limit. A balance that exceeds 75% of your limit might trigger a “red flag” on your credit report.
Having and using a credit card wisely can be a useful tool to building your credit history.