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How to Use a Credit Card Responsibly

How to Use a Credit Card Responsibly

Sometimes credit cards get a bad rap. And to be honest, sometimes it is completely understandable why they do. It can be easy to spend with a credit card because you don’t actually “see” the money – it is just there for the taking. This can lead to debt, and if you’re not able to pay your credit card off each month, you can find yourself getting further and further behind, given the astronomical interest rates on a credit card.

However, I’m here to tell you that a credit card can be a very useful tool and if used properly can actually make you some money.

Here is a list of tips on how to use a credit card responsibly. Stick to these and you’ll be in good shape!

1. Pay off your credit card EVERY month!

When I say pay it off every month, I mean you must do this always! Never carry a balance. If you miss a credit card payment of $500 and have an interest rate of 19%, you are immediately going to owe $95! That’s $95 of totally wasted money! Now, imagine if you leave that $500. The next month you’ll be paying 19% on $595 and so on!

2. Do not be seduced by points/rewards.

Points and rewards that you can earn for using a credit card can be great, but don’t be in such a hurry to earn points that you spend wildly and are unable to pay off your card each month. Points and rewards are a great perk but only if you can afford what you’re spending.

3. Don’t be seduced by lower interest rates.

Sometimes credit card companies will lower the interest rates of a credit card to encourage you to spend more. But, let me let you in on a little secret: if you pay off your credit card on time each month, the interest rate doesn’t matter! Just because you have a lowered rate, don’t think that it’s okay to carry a balance. Interest rates should not matter!

4. Track your spending.

It can be easy to lose track of your spending with a credit card because when you make a purchase, you don’t have to hand over any cash – just a piece of plastic! So, make sure you are aware of what you’re ringing through on your card. An easy way to do this is to closely monitor your credit card in online banking. Here, you’ll be able to see each purchase within a day or two of making it and see your running balance.

5. Have the cash available for each purchase put on your credit card.

The best way to use a credit card is to buy only things you can afford, meaning you have the money to pay for the purchase. This way, you can use the credit card to safely earn points/rewards, you can establish positive credit and you can benefit from the convenience of not needing to have your cash with you. But remember, the cash must be put aside to pay for the credit card when the bill arrives.

6. Always closely review your credit card bill against your receipts.

I have had multiple experiences with fraudulent charges appearing on my credit card statement. Some of them have been relatively small but the majority of them were quite large ($400 sunglasses)! The credit card company was always quick to reverse the charges but unless I had been diligent in reviewing my statement, these charges could have gone unnoticed.

7. Losing control of your spending? Cut up your card!

If you find you’re just not able to keep on top of your credit card payments and spend more than you budget regularly, then it’s time to cut up the card and go back to cash! No shame in that, do what works best for you.

Have you ever had problems with using a credit card?

Do you have any tips to add to the list?

Photo by Kat R via Flickr


  1. Some great suggestions for utilizing credit cards. Since the reality is that they are going to be a part of our daily lives, the should absolutely be used responsibly and wisely.

  2. Love number two for a lot of people can be seduced by reward cards and get themselves in a whole bunch of trouble. Credit cards are credit cards and if you don’t use them responsibly it’s a recipe for disaster.

  3. I have such a love/hate relationship with credit cards! They are great for emergencies, but I still have temptation to use them. Luckily I don’t have any cc debt (anymore) and I have learned my lesson about overusing them!

  4. Great suggestions! My granddaughter has just starts liking to “play store.” I’m wondering if we should give her toy money or a pretend credit card. I’m leaning toward the toy money so that she doesn’t get the idea that credit cards give you things for free. Still,it’s what she sees her Mom using at the store. Any thoughts?

    • All I can think is take her to the bank once a month so she also see’s you paying off what you baught for the month

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