Tips for Using Credit Cards
Posted On: 01/18/2022
Having a few credit cards in your wallet with higher credit limits can seem like a slippery slope, but there are several ways to use them to your advantage. Credit cards can be used to help build credit and improve your score, and many come with several perks. Find out more about how to use credit cards responsibly from Generations Bank, based in Seneca Falls, New York, with several locations in the surrounding area.
Pay Off the Balance Each Month
One of the biggest ways cardholders accrue balances so high that it is hard to climb out of debt is by not paying off their balance each month. By clearing the balance, you can avoid paying exorbitant amounts of interest on purchases and prevent spending more than you are able to pay off at any given time.
While managing your monthly payments, make sure you never skip one. Even if the minimum is the only amount you can pay, it's better than nothing. Missed payments can lead to late fees, a damaged credit score, and penalty interest rates. If you're hoping your credit card usage will help boost your credit score, mid-cycle payments may help. If you're able to make extra payments during the billing cycle, you can keep your credit utilization ratio down and help save on interest.
Stay Well Below Your Credit Limit
A common mistake many cardholders make is to spend beyond their means and edge closer and closer to their credit card limit or even max it out. As a rule, your balance should be less than or equal to 30% of your credit limit on any single card or set of cards you have in your wallet. Many credit card companies offer mobile alerts that make it easy to see quickly where your balance falls.
Use Bonus Rewards to Your Advantage
One of the perks of owning a credit card is the rewards that may come with everyday purchases. Bonus offers make it easy to save on spending and may even earn you some cash back. The diverse selection of rewards available suits the lifestyles of many cardholders, including:
- Small business owners
- Food lovers
- Frugal shoppers
The key is to find the right credit card for you and your everyday spending habits. Whether you love ordering takeout or are looking to get more from the routine purchases you make every week, there is likely a credit card out there that can meet your needs.
Use Your Credit Card Statement to Monitor Spending
Did you know that you can use your credit card as a budgeting tool? By monitoring your balance every month and keeping an eye on the list of purchases on your statement, you can easily see where your money goes and make meaningful changes to prevent overspending. Some credit card companies even offer analysis tools to help make financial management simple.
Learn More from Generations Bank
Let us help you make the most of your budget and learn how to use credit cards effectively. Headquartered in Seneca Falls, New York, with several offices in the surrounding area, Generations Bank offers a wide variety of personal and business banking options to suit the diverse needs of its customers. Reach out for more information today.