Best Tips on How to Use a Credit Card

Best Ways to Get the Most Out of Your Credit Card without Making Mistakes

There’s more to your credit card than mere purchasing convenience. Yes, your credit card offers a great way to make purchases, but it can also be key in helping you build or rebuild credit and unlocking a more fulfilling financial future. But with great purchasing power comes great repayment responsibility. Below are some basics on how to use a credit card wisely and a few best practices to help you get the most out of your card.  

How Credit Cards Work

Every time you make a purchase on credit, you agree to pay back the purchase price (plus interest, if applicable), and your credit card provider agrees to front the cost. At the end of every billing cycle, your credit card issuer will send you a statement that includes a minimum payment due and any interest charges that may have accrued.

You can study this statement to learn lots of important information, including your credit limit — the maximum amount you can put on your credit card at any time — and your available credit — the difference between your credit limit and your current credit card balance. You can also check your APR, which is the Annual Percentage Rate your credit card issuer uses to calculate interest.

As long as you pay at least the minimum payment due on each statement, you can avoid late fees and having a late payment show up on your credit report. If you owe more than the minimum amount due, you have a choice to make. You can either pay your balance in full, or you can pay at least the minimum payment due and carry the rest of the balance. If you do decide to carry a balance on your card, your credit card issuer will charge interest— essentially the price you pay for borrowing money on credit.

How to Use a Credit Card

You know how to use a credit card — you can swipe, insert, tap, or input your credit card number to purchase just about anything. But do you know how to use a credit card to get the most bang for your buck? Here are our best tips:

  • Check Your Balance Regularly: It’s easy to get carried away with a credit card. Because making purchases on credit is so easy, it’s also easy to lose track of your balance. To avoid putting too many purchases on your credit card all at once and making it more difficult to stay on top of your repayment plan, check your balance regularly.
  • Always Pay Your Bill On Time: Making your credit card payment on time each month is the single most important thing you can do with your credit card. Missing a payment not only results in late fees, but it can also negatively impact your credit score, which will make it more difficult to borrow money in the future.
  • Know How Your Interest Is Calculated: Most credit cards come with a variable interest rate. That means your rate is subject to change based on a benchmark, like the Prime Rate. Check your monthly statement to find your current credit card APR. You can use this percentage rate to calculate exactly how much you’ll owe.
  • Watch For Credit Card Fees: In addition to interest, your credit card issuer may charge annual fees or other fees associated with maintaining your card. Be aware of when and how much you have to pay so you can plan to add these expenses to your existing balance.
  • Stay Below Your Credit Limit: While you can technically spend up to your credit limit, it’s a good idea to keep your balance as low as you can. This can help you make sure you’re not spending more than you can afford to pay off. Plus, a lower credit utilization is generally better for your credit score.
  • Report a Stolen or Lost Card Immediately: If you’ve misplaced your card or you see a fraudulent purchase on your account, contact your credit card company immediately. They’ll work with you to freeze future purchases and issue you a new card.
  • Monitor Your Credit: As you make purchases and payments on credit, check your credit report and credit score often. Doing so can help you spot mistakes and any possible instances of fraud that may impact your score. Plus, keeping track of your score can help you make changes to stay on track with your credit goals.

How to Make Your Payments On-Time

As we mentioned above, making on-time payments is the single most important thing you can do with your credit card. In fact, according to FICO®, payment history accounts for 35% of your overall credit score. Even one late payment has the potential to derail a history of on-time payments. Consider the following practices to keep up with your payment deadlines.

  • Set A Reminder to Pay: Add a payment reminder to whatever device you use to stay on top of your to-dos — a smartphone, calendar, or planner. There are so many ways to set reminders these days. Find the best method for you so that you never forget when a payment is coming due.
  • Set Up Autopay: If you’re prone to procrastinating (who isn’t?) or you just have a million things going on in your life, autopay can make credit card payments practically painless. Set up an automatic payment from your financial institution to your credit card issuer every month.  
  • Pay Early: Instead of waiting until the last minute to make a payment, it’s a good practice to always make your payments a little early. Set up an automatic payment to be processed a few days before your due date, or schedule a reminder to pay a week or so ahead of time.
  • Change Your Payment Date: You might consider changing your credit card payment due date to better align with your other bills and/or incoming paychecks. You can call your credit card issuer to ask if you can bump up the due date in your billing cycle. If it makes it easier for you to pay your credit card on time, it’s probably worth it.
  • Budget Your Money: Maybe the best financial advice you’ll ever get is to live within your means and learn how to use a credit card wisely. Make a budget to help you save and spend your money wisely, and stick to it. Include your credit card payment in your monthly budgeted amount and you’ll be on your way to wiser money management and more considered credit card spending.


Your credit card is an amazing financial tool. You can use it to make convenient in-store and online purchases, and build and rebuild your credit. The best part: as long as you’re consistent with your on-time payments and you use it responsibly, your credit card will continue to provide financial benefits for a lifetime. Now that you know how to use a credit card to your advantage, you can avoid common mistakes and missteps, and get the most out of your card to build a better, brighter financial future. 

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