How to Manage My Credit Card! You Want To See These Key Essentials.

how to manage my credit card

“I Need to Learn How to Manage My Credit Card!” A Financial Guide

Have you found yourself saying “I need to learn how to manage my credit card,”?  A credit card can be a wonderful tool for building credit, as well as a great emergency backup plan. laptop plan to manage financial plan

You may need one to rent a car or a hotel, and if you run short on money at the end of the month, it can be a huge help in tiding you over financially. But it should come as no surprise that credit cards can quickly become a major problem. That’s why you need to know how to manage a credit card wisely.

With minimum payment options, high-interest rates, and the temptation of having the reserve of extra money available, it can be very easy to find yourself in a lot of debt with credit cards. And once you have it, it can be very hard to get rid of.

Now that we have that settled let’s go after the key essentials on how to manage my credit card.

Pay Your Bill on Time

One of the biggest advantages of having a credit card is it is a great way to build credit. Having a high credit score can affect your ability to get a mortgage or car loan, as well as rent an apartment or even get a job. And a major factor in calculating your credit score is when you pay your bills.

You want to be careful to always pay your credit card bills on time. Late payments can mean extra fees, and they will drag your credit score down. Make sure you know when your bill is due, and if possible, pay it early or set up autopayment.


Watch This Video About How To Manage Your Credit Card


Pay Your Bill in Full

When you look at your credit card bill, you’ll see the total amount you owe on your credit card. And then you’ll see a much smaller number that is your minimum required payment. It can be very tempting to just pay that much smaller fee and enjoy the extra funds.

This is a terrible idea. Although paying the minimum may seem like a great way to save money now, in the long run, it will lead to a spiral of debt. Make sure as much as possible to pay your credit card off in full each month.

Check Your Credit Score Every Month

Remember that credit score we were talking about earlier? Well, you don’t want to apply for a loan and find out at that point that you have a low credit score. You want to keep a close eye on your credit scorecheck mark with the word check mark underlined

You should be able to access your FICO score through your online credit card account. Keep an eye on it, and pay attention to what helps raise your score. This will also help you develop healthy credit habits.

Don’t Spend for Rewards

Oftentimes, credit cards will come with attached rewards programs. You may get money back on certain purchases, or you might get miles you can use for travel. Spending more money on your credit card will mean more money back in your pocket, right?

Wrong. It can seem like a good idea to spend more money in order to get more rewards but don’t be fooled. The rewards you get in the short term will mean more debt and higher interest paid in the long term.

Don’t Max Out Your Card

Another mistake credit card users make is maxing out their credit cards. Your card will come with a credit limit – the amount of money you can spend on that card. But as much as possible, you never want to hit that limit.

Not only will maxing out your credit card make it that much harder to pay off the card in full at the end of the month, it can hurt your credit score. Lenders want to see that you don’t use the full amount of money allowed to you. Keep credit spending to a reasonable amount as much as you can.

Avoid Cash Advances

Most credit cards come with a feature known as a cash advance. Much like it sounds, a cash advance allows you to draw cash from your credit limit. It’s not really that different from just using the card itself, is it? signs showing different directions to desire or avoid

As a matter of fact, cash advances are one of the most expensive ways to borrow money. Not only are there bank fees associated with cash advances, the interest on these funds can be higher. As much as possible, avoid cash advances at all costs.

Check for Fraud

Keeping your card information secure is very important, as you doubtless know. But no matter how careful you are, you are likely to have your card information stolen at some point. While some banks will keep an eye on your account and alert you of fraud, you want to pay attention as well.

Go through your statement each month and make sure all charges are yours. Sometimes banks will miss a fraudulent charge, and you don’t want to wind up paying for someone else’s purchases. Call your bank about any suspicious activity immediately.

More Answers to the Question “How to Manage My Credit Card”

Keeping a good credit score and a healthy credit life can be a simple thing. It requires financial discipline, and it will often mean you can’t make that fun splurge purchase. But in the long run, the rewards you reap will far outweigh that new item.

If you find yourself saying, “I need more information about how to manage my credit card,” check out the rest of our site at Credit Squared. We offer information about the best and worst credit cards and details about rewards plans. Discover the world of credit with us today.

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8 Comments

  1. Nice post dear very helpful.

    I’ve been looking for ways to manage my credit card better, so I read the article all the way through and noted the points you gave.

    But I’m having some issues lately I wish to share with you.

    I got a phone call from someone selling “credit card loss protection insurance.” Is this a good thing to buy this insurance?

    • Not knowing your particular circumstance it would be difficult to give you a comprehensive answer.  It depends on the types of credit issues you are currently experiencing.

      If you are expecting a job loss or you want to have coverage in case of a disability, injury or even death then credit card loss protection insurance might be a smart thing to have.

      Again, not knowing your current situation it would be difficult to say.  Really it comes down to what makes you comfortable.  As always, do your research before committing to anything.

      Here’s a link that provides more information on credit card loss protection insurance.

      Good luck.

  2. This is very informative.

    I usually follow all of these rules. What we struggle with is the amount of credit that we use. You know, small things pile up. Small amounts done daily totals up big at the end of the month.

    I usually try to pay all the amount in full because I don’t want to pay the high interest rate the credit company charges.

    I don’t know if this is practical, but I borrow from my line of credit to fully pay the balance. At least the interest here is less than in credit cards.

    Marita

    • Hi Marita – I’m happy to hear the post was informative.

      I think you are taking the right approach by attempting to payoff your credit card balances each month.  I can fully understand that everyday incidentals can pile up and when you receive your statement it’s a shocker.

      If you haven’t already, try to setup balance alerts on your credit card accounts.  You’ll get notifications when you start hitting your monthly limits and when you do, you can dial back or postpone other expenses to stay on budget.  It may take a little practice, but you’ll get the hang of it after awhile. I do it, and it has been a tremendous help.

      If you must, using lower interest rate lines of credit I think is a smart move.  If at all possible, try to stay on budget. Only use your credit lines for major things, like unexpected car repairs, appliance purchases or home improvement projects.

      All the best.

  3. Great article, I try to do what you recommended. I also call the credit card companies from time to time to ask them to lower my interest rate; they have done it several times. A while ago I got another loan to consolidate my credit card debt, to be paid off at a smaller interest rate. Now I’m hesitant to even use my cards, is it ‘bad’ to have cards and not use them for a long time?

    • Hi Olivia – Thanks for the positive feedback about the article. You are doing all the right things, so keep it up. I would use your lines of credit for some purchases, just so the credit card companies can report activity to the credit reporting agencies. You need some level of utilization in order to show up on FICO’s credit score radar. Just don’t over do it, and make sure you can pay off what you charge each month.

      All the best.

  4. I think a lot of people learn bad habits from their parents when it comes to credit card usage. I see people around me treating credit card spending limits like it is their money, versus being borrowed money. Sure it is nice to earn points and have cash advances, but you shouldn’t spend money that you don’t or won’t have.

    The 18%+ late fees will pile up, to the point where many can never afford to pay back the balance. There is nothing that makes remote financial sense about borrowing $100 and paying back $118 or worse yet, years later paying $100’s in interest on that $100.

    Some really great advice here on how to properly and effective manage your credit cards.

    • From their parents or maybe it’s just in their DNA.  Everyone has some sort of vice, but a bad credit card habit can really set you back.

      I’m not sure why people think it’s their money and not borrowed money. It’s probably the instant gratification of the spend now culture.  I want it now and I’ll worry about the payments later.

      It go’s back to basic education and the lack of understanding about compound interest.  Like you pointed out you can end up paying hundreds of dollars in interest years later on purchases you put on credit now.

      We need more education in our school systems K-12 and parents setting a better example about responsibly using credit.  

      Hopefully my advice will reach more people that can implement these simple steps on how to manage their credit card wisely.

      All the best.

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