The Top 12 Tips for Using Your Credit Cards Responsibly

Being a responsible credit card user is extremely important, but it takes some work. Aside from the obvious benefits of proper credit card use, those who utilize their cards responsibly have a better quality of life. With improved credit utilization habits, it’s much easier to plan and reduce the amount of stress you experience. The Top Habits of Responsible Credit Card Use Simply put, being in control of your finances fosters freedom in numerous ways. The following habits will help you stay focused on the main objective: 1. Register Your Card on the Issuer’s Website Banking online a great idea, especially if you use credit cards. If you’re not yet registered on your card issuer’s website, doing so as soon as possible is vital. Card registration comes with exclusive access to your account, not to mention rewards programs and instant customer service. When traveling, especially abroad, calling the issuer from a long-distance location won’t cost any money - you can simply log in and get what you need, including text or email reminders about activity on your account. 2. Sign Up for the Auto-Pay Option Each credit card issuer offers a free auto-pay option for its members, so take advantage. Not only does the program help you avoid late payments and fees, but it can also prevent your credit score from decreasing. Usually, card holders can sign up on the issuer’s website but if not, simply call customer service to get started. Just be sure you have enough money in your bank account to cover the payment when it’s due or else you’ll end up dealing with overdraft charges that could have seriously damaging effects to your financial stability. 3. Check Your Statement Monthly Being enrolled in an auto-pay program might help you avoid late fees and damages to your credit score, but it will do little to ensure you’re free from fraudulent activity or identity theft. Each month, take time to review your statement to ensure there are no erroneous charges. If questionable charges are there, contact the card issuer as soon as possible to get the situation cleared up. After all, negligent use makes you less eligible for a small personal loan , unsecured credit lines, and other lucrative offers. 4. Request Text or Email Reminders Logging in to your credit card issuer’s website can be bothersome, especially if you’re too busy to remember. Instead, simply request frequent email or text message reminders about your balance, recent charges, payment due dates, and/or special offers. Remember, if you’re getting close to your limit, refrain from using your card until you pay the balance down significantly. 5. Pay the Balance in Full Auto-pay and email or text message reminders will let you know how much you owe to the credit card company. Responsible card owners will avoid interest and fees by paying their balance in full as soon as they get the bill. If you can’t afford to pay in full, then pay as much as you can afford and quit using your credit card as much. You can also call the card issuer to negotiate a lower interest rate, but that doesn’t always render a better deal. 6. Use a Rewards Card That’s Ideal for Your Spending Habits If you’re not using a rewards card, you should be. In addition, the types of rewards you receive should match your spending habits as much as possible. Those who drive a lot should opt for cards that give cash back on fuel purchases; people who travel by plane frequently should choose a card that gives miles or airline discounts. Try to stay away from cards that give cash back on everything, as those tend to tempt you into spending more than usual and prevent you from getting thousands of dollars in rewards each year. 7. Know Your Card Perks Did you know that some credit card issuers offer replacement and/or refunds on some of your purchases? Indeed, you likely have more card benefits than you realize. Each issuer offers a checklist of incentives for each member, so be sure you know about them. Call the issuing company to find out more. 8. Use Those Perks Start using your credit card perks right away. For instance, when you take a vacation, pay with the card that offers rewards for airfare, car rentals, or hotels. If one of your previously purchased items gets lost or stolen, report it to the card issuer to receive a refund. When the cost of something you bought lowers, call the company to request a purchase price adjustment. Not only will this help reduce your balance, but it will also keep your credit score higher as a result. 9. Use Your Rewards Carefully Simply accumulating rewards is not enough, you need to spend them. However, spending them frivolously is never a good idea. In some cases, card holders can use their rewards points for products and services and those points should be spent on things that relate to the original purchase. Buying gift certificates and unneeded items just because they’re offered is not a wise move. 10. Choose a Feasible Payment Date One of the least-known habits of responsible credit card ownership is choosing the perfect date to make payments. Although the issuer will automatically set a date, it’s completely acceptable to change the due date to something that better suits your schedule. However, please note that not all credit card companies allow you to do this more than once, so pick something that works right the first time. 11. Use Your Card At Least Once a Year Failing to use your credit cards annually can look bad on your credit profile. It says that you’re so unsure about your ability to be responsible that you’re unwilling to use the card at all. This poor habit can make you ineligible for even the best personal bank loans, even if your credit score is relatively high. In addition, failure to use your cards often enough might result in them being canceled by the issuer. Put simply, your credit utilization is a prime factor in how trusted you are to lenders, so use it wisely and make purchases on your credit cards at least once per year. 12. Don’t Cancel the Account Even if you don’t plan to use your card often, it’s important not to cancel it for any reason. In fact, owning a revolving personal line of credit bodes in your favor regardless of how useful it is to you. Cancelling your cards can not only lower your scores but also put your finances in harms way, preventing you from having a reliable emergency fund, protection from fraud or identity theft, and funds when an unexpected expense pops up. TIP: The only exception is if your card issuer charges you an extra fee for negligent use, as the fee may harm your credit report more than canceling the card would.

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