How to Get the Most Out of Your Credit Card
While Using it Responsibly
by J.M. Troppello
Using a credit card can be good or bad for you.
“If people don’t think about their finances and get involved with building a financial trajectory early in life, it’s kind of a substantial problem.” – Baiju Bhatt
Your positive or negative financial journey simply depends on how you use your credit card. It starts with learning to respect its power to make your life easier or cause you to experience financial issues.
Consider the following 4 ways to get the most out of your credit card while using it responsibly.
1. Do Your Own Homework
Don’t pick a credit card without checking out all the features. It’s important to understand all the features, benefits, and other rewards. Some rewards might include:
Identify other benefits like the following:
Insurance for rental cars
Insurance for trip cancellation
Credit shield protection
Liability for lost cards
2. Make a Smart Choice
To become more financially secure, you need to be smarter with your money. Look for a credit card that provides consumers with benefits like cash back or reward points when you make the following types of purchases:
Practice smarter spending by tracking earned reward points in an excel sheet. Take advantage of the reward points you earned by redeeming products or services that you qualify for from the credit card.
3. Make Your Credit Card Work for You
Use your credit card wisely and as a means of building up your credit. However, use it with the same mindset that you use your debit card—like how money comes directly out of your bank account.
Utilize your credit card to make monthly purchases that you’d usually use your debit card for. Make sure that you pay the full amount due each month—on time—so you don’t incur any interest charges. Depending on your credit rating and special offers, your interest rate could be between 0% - 29.9%. The average interest rate is 17.87%. You’ll benefit from building your credit rating and from various reward points.
4. Track Your Credit Rating
A credit score of 750 or above is considered creditworthy. If you miss a credit card payment or pay it late after the grace period, you risk getting a lower credit score.
It is also important to focus on striving to achieve a high credit utilization ratio. This ratio is a factor in determining your creditworthiness for increased credit card credit limits or if you want to apply for a new credit card or a loan.
You can calculate your credit utilization ratio when you divide your entire credit owed by the available credit limit.
Monitor your credit rating to ensure that you’re on track with fulfilling all your personal financial goals.
Use Your Cards Responsibly
Do your own homework. Make smarter choices. Let your credit card work for you. Track your credit rating. By implementing these four tips, you can get the most out of your credit card.
Learn more about using your credit card responsibly so you can start achieving all your personal financial goals—and make positive and productive changes in your life today.