Beginner’s Guide: How to Use a Credit Card?

Credit cards are known for their usefulness and reliability. However, they can be dangerous if you aren’t aware of how to utilize them properly. But if you’re an expert at using them, you can enjoy lots of rewards and benefits. Below are some basic rules of using a credit card.

Know what you can afford

Don’t make the mistake of utilizing your card to spend money that you don’t have. To avoid this mistake, only charge purchases that you can afford to pay with the money available in your bank. 

Don’t spend more than the limit

In order to keep an excellent credit score, only use 30% of the credit balance. This means that if you have different credit cards having a total limit of $10,000, your purchases should not exceed more than $3,000 at one time. 

Pay in full

Make a habit of paying off the full statement balance each month. If you start to carry a balance, interest will be charged on your daily purchases. This will lead to big debt. 

Search worthy rewards

If you’re a credit cardholder, you can avail whatever rewards are available from your issuer. Rewards are an important point to consider before signing up for a credit card. You should make sure that the rewards are valuable and accessible to you.

Learn the available benefits

A credit card is a short-term and interest-free loan that also offers perks to customers when they make a purchase. Many credit cards offer extra advantages such as coverage for stolen products and built-in purchase protection.

Read your statement

All the charges mentioned on your monthly statement should be accurate. In case you find an incorrect purchase, tell your issuer instantly as it can be dangerous. Thieves usually make little purchases to test stolen credit card numbers and they begin to spend more if the old purchase goes unnoticed.