What Should I Use My Credit Card For: Tips for Responsible Credit Card Use

Most Americans own a couple of credit cards, and for good reason. It’s a secure and convenient way to purchase instead of carrying cash. Your card usage and repayments also help to maintain an active credit history that pays forward in the future when lenders need to look at your credit history. With many credit cards, you also earn rewards that you can redeem for more products or services. And no, having a credit card does not sink you into debt. You can only get into debt if you fail to use your credit card responsibly.

It follows that your next question is, “What should I use my credit card for?”

This article discusses responsible credit card use to help you avoid taking on more financial responsibilities than you can manage and keep you from a credit card debt trap.

Top 5 Tips for Responsible Credit Card Use

As you apply for a credit card, keep the following tips in mind to maintain healthy credit card habits:

Only spend on what you can pay for

It’s tempting to splurge on your wants because you can access some extra money. But remember that credit card use is not consequence-free. If you miss a payment, you’ll have to pay back the money you spend, plus interest and late fees. Even if you’re earning rewards for your spending, they cannot be of greater value than the interest you’re paying.

So, before getting into a store or a shopping website, first establish what you should use your credit card for and stick to the plan. Only swipe your card for things you need and can afford. When you use your credit card this way, paying off the credit card balance will be easier. Moreover, maxing out your credit card with high usage can negatively affect your greater value credit scores.

Never delay your credit card payments

Failing to pay your credit card bill on time attracts penalty APRs and late fees. This reflects badly on your credit history and puts a negative mark in regards to your responsible credit card use. The negative mark stays on your credit score for seven years. So, pay your bill on time because if it’s 30 days past due, your card issuer will report the delay to credit bureaus.

No matter what you should use your credit card for, the best way to stay on top of your bills is to automate the payments, at least to cover the minimum amount due. Set up autopay with your bank account and ensure there’s enough money to cover your monthly bills. With the minimum covered, pay an extra amount during the month. Alternatively, schedule a day on your monthly calendar to pay all your bills. This method is helpful, but if you fear you could forget a bill, opt for the autopay option.

Pay more than the minimum payment

Although paying the minimum requirement is better than missing a payment because you avoid late fees and penalties, paying the entire bill in full is even better. The amount due above the minimum payment attracts interest, and with credit cards charging compound interest on your credit balance and the interest accrued, the debt can multiply. Therefore, to avoid getting caught in a credit card debt trap, pay the statement balance fully, and if unable, pay the maximum amount you can.

Have account alerts

After establishing what you should use your credit card for, set up text or email alerts on the credit card accounts. As a matter of responsible credit card use, they help to monitor spending, avoid late payments, and look out for fraud. For example, you could turn on alerts to be notified of payments posted, approaching credit limit, payment due date, and current balance. Also, have alerts for purchases made, balance transfers, card declined, foreign transactions, and cash advances. Getting notified in real-time promotes responsible card use and lets you catch fraudulent use early.

Report lost or stolen cards immediately

Regularly check your credit card statements to ascertain that the entries posted belong to you. Turning on the alerts helps with this tremendously. But, if you suspect someone is using your card without authorization, let the issuer know immediately, and they will likely deactivate it. Many issuers provide security features you can use to lock your lost cards instantly. Once you find your card, unlock it and continue using it as easily.

What Should I Use My Credit Card For?

In a nutshell, your credit card makes purchases convenient and helps you build or rebuild credit . Responsible credit card use shows that you can manage credit well, while bad use could get you into a credit card debt trap that destroys your credit card history and scores. For more information on ensuring credit cards serve you well and suggestions of some great credit card offerings, get on LendMeMoney.com today and get the best credit card offers!