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!
- 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.
- Set up automatic payments on your card. This will help you avoid fees, finance charges, or other negative effects to your credit score.
- Pay more than the minimum payment each month. If possible, pay the full balance each month.
- Avoid cash advances. Cash withdrawn on a credit card may have higher interest that is charged immediately.
- 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.