5 Credit Card Tips to Make Your Card Work for You, Not Against You

A credit card can be an amazing tool to build up your credit score, make purchases without cash and earn rewards — but, as you know, you need to be careful because credit mistakes lead to all kinds of financial trouble. These credit card tips will help you make sure your card works for you, not against you.

Tip 1: Always Make Your Minimum Payment

When you get your bill each month, it will ask you to make a minimum payment that is usually less than your entire balance. Always, always, always make your monthly payment on time. If you miss the deadline, even by one day, the credit card company may charge a late payment fee of up to $27 for a first-time offender, according to CreditCards.com. They’ll report your late payment to credit-rating agencies, and your credit score will take a hit.

As long as you make your minimum payment, you will avoid these problems while adding points to your credit score.

Tip 2: Don’t Carry a Balance

While it’s easier said than done, you should do everything you can to avoid going into credit card debt. When you have an unpaid balance, the credit card company will charge you interest every month. Even worse, maxing out your cards hurts your credit score.

Credit card debt sneaks up on you when you don’t have a spending plan. It’s important to set and stick to a weekly budget, like you would with cash.

Tip 3: Use Balance Transfer Cards to Pay Off Debt

If you’re trying to pay off some credit card debt, a balance transfer card could be the solution. These cards let you move over debt from other cards and won’t charge you interest for a year or longer. The money you save on interest can go straight into paying off your debt. While these cards charge a balance transfer fee for moving money over (about 3 percent, according to CreditCards.com), it’s still far less than a year of interest on another card.

Speaking of interest, pay attention to the APR on the card you choose and make it a goal to work toward zero percent.

Tip 4: Study up on Rewards

Many credit cards offer valuable rewards like free flights, hotel stays, gift cards and cash back. You collect these rewards over time just for making purchases on your card. Take the time to find a card with rewards that you really want. You don’t want to get stuck with a bunch of air miles for an airline you never use.

Read up on the terms and conditions for rewards. For example, many cards offer a sign-up bonus, but you have to spend a minimum amount at the outset, like $3,000 in 90 days, or you miss the entire bonus. There are plenty of resources online, like the The Points Guy, who research every credit card and give you strategies on how to maximize your rewards.

Tip 5: Limit Yourself if You Have to

A credit card can be a lot of temptation, and there’s no shame is setting limits to keep out of trouble. One option is to ask the company to lower your spending limit to a safe amount, say $500. That way, you can never get too far into debt.

For some people, the best credit card tips are: A. Hide them out of sight and B. Keep them out of sight. You can hide your cards in a drawer or even cut them up. You’ll build up your credit history while avoiding the temptation of credit card debt.

Getting the most out of your credit card takes discipline, but it’s definitely possible. Spend some time researching credit cards to find the one with the most to offer you, or consider a balance transfer card. You work hard for your money; let your credit card work for you.

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