Smart Credit Card Usage
A credit card can be one of your first steps to building a strong financial future through establishing a good credit score. However, owning one can also be an exciting thing that can get out of hand if you’re not used to smart credit card usage. Here are some smart credit card tips to help you better utilize this financial tool.
Comply With Your Card’s Terms and Conditions
After opening a new credit card account, you should make sure to thoroughly go over the credit cardholder agreement and the other disclosures enumerated. This should keep you up to date with interest rates, payment deadlines, and important information you should know. Complying with the terms and conditions is crucial to using your credit card safely and efficiently.
Set a Budget
One of the easiest yet most important things you should do when you first own a credit card is to set a budget for yourself. Just because you can buy whatever you want with your card does not mean you should. Make sure you can afford the things you buy even without a credit card.
Pay Your Monthly Bill in Full
While settling for the minimum payment required per month may sound like an easier and less expensive option, it will cost you even more over time. Paying the minimum adds more interest to your monthly balance until you finally pay the total amount due. Pay the month in full to avoid costly interest.
Keep Track of Your Spending
Even after setting a monthly budget for yourself, you should take note of the amount you are spending every billing cycle. You can do this by keeping a personal log or using your credit card company’s mobile app or website if available. Once you’ve hit your monthly limit, you should avoid using your card until you have paid it off.
Having this kind of discipline with your credit card can help you build a good credit score and keep you out of debt.
Don’t Max Out Your Card
It may be tempting to charge up to your credit limit, but there is a very important reason why you should not. One of the biggest contributors to your credit score is your credit utilization. Maxing out your card every month can hurt your score and set you up for debt that may take a very long time to pay off. Owning a credit card does make spending money easier, but it can be a slippery slope to debt if not managed properly.
Use Your Credit Card Smarter With Our Help
Are you looking for help with your credit score, credit card management, or finances? Do not hesitate to get in touch with our team at Firefighters Credit Union in Wisconsin. Let our experts know what they can help you with, and we will do our best to give you solid financial advice.
