The moment you receive your shiny new credit card in the mail and peel off the activation sticker, it can seem like the possibilities are limitless. Well — at least up until you hit your credit limit. But a careless attitude toward spending can pave the way to even more financial woes. To avoid stacking up more debt, follow these tips and become more responsible with that plastic.
1. Check your statement monthly
Even if you know exactly what you’re using your credit card for, make it a point to review your statement once a month. This is a good way to spot erroneous or fraudulent charges that you otherwise might have missed. It also helps to have a better sense of awareness about what you’re purchasing and where you can cut back on nonessential items or services.
2. Pay your balance in full
Pay your statement balance in full each month if you can afford it. This is the easiest way to avoid interest and fees. If you happened to rely on your credit card a bit more than usual, that’s okay – but aim to make more than the minimum payment, at the very least. When you pay even just a little more than the minimum, you’ll ultimately pay less interest over time.
3. Use rewards wisely
Chances are, you can find a card that caters to your spending habits. If you enjoy traveling, consider signing up for a card that rewards your spending with points toward your next vacation. Some cards offer cash back on certain purchases, like gas, while others provide a flat percentage of cash back on all purchases. Make sure you research the card that offers the best benefits for the areas you spend on the most – adding up to more money back in your pocket. The catch? Be careful not to use your plastic on frivolous purchases just so you can snag that reward.
4. Keep accounts open
Many people make the mistake of canceling their cards once they’ve paid them off. Unfortunately, that can actually damage your credit score. Tuck that balance-free plastic away and make it a point to use at least once a year so you won’t run the risk of having the card company cancel it.
5. Use technology to your advantage
Today banks and credit card companies aim to ease the payment process for consumers with a number of online tools. It’s a good idea to sign up for an auto-pay option that allows you to pick the date and amount of your credit card payment each month. Most companies will also offer email and text reminders when your payment date is approaching, so you can make sure you will have enough in your account to cover the transaction. You can download an app on your smartphone to check your statements, set up payments and remain a responsible credit card user over time.
Credit cards are a powerful tool for building credit. At BetterCredit, we want to help you harness that power for good. Contact us today to learn how we can help you take back control of your credit card debt and spending to reach your financial goals.