How can we use a credit card to our advantage?

ByCrystal
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Credit cards can be helpful at times but can also be easy to lose control of and overspend. Why do these simple pieces of plastic in our purses get us into trouble at times? How can we better manage the use of them? If you feel like you don’t have control of spending and the balances keep building, then I recommend just using your debit card and cash so that you can only spend what you have. But if you decide that you can pay off your cards each month and the benefits of that particular card are useful and great to have, then the card can be very helpful.

I believe in a minimal view of credit cards-only one or two max. This helps you keep control of what you have open and it’s easier to keep track of and always pay on time when there is only one or two to keep an eye on. From there decide what features are important to you. The credit card that I find very useful for me is the Chase Amazon card that I have. It’s just a place that I’m always getting household items from and gives points that I can use towards other purchases. For you it could be a hotel card, an airline card, or just a bank card that gives great rewards towards purchases that you need. You have to figure out what fits best is your life and is a reward that you know you’ll use.

It is definitely best to stay away from annual fees if you can. These fees can get hefty $100-$300 year just for having the credit card open. You have to analyze if the reward of the card outweighs that fee. If not, only use a card with no annual fee. Also, I feel its best to steer away from individual store credit cards such as H&M, HomeGoods, TJ Maxx. These cards tend to have higher interest rates and of course can only be used at that store. Just say no to those offers when asked at the register.

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Lastly, do not max out your cards. If you feel like it’s getting to that point and you’re using the card too much then it may be best to use debit only and lower your spending. On your credit report, one of the things that goes into factoring your credit score is the amount of usage of the credit limit. If you have a limit of $2,000 and have a balance of $1950 it’s going to hit your score a lot harder than if your balance was $500. Always try to stay under 30% usage of your limit.
Paying them off monthly and just using them for the perks is best!