How to Have Success with Credit Cards

by | May 10, 2021 | Financial Planning

When it comes to managing your finances, credit is a very important part of the equation.  Along those same lines, credit cards become very important as well.  For something that is so important for people, we often don’t exactly get set up for success.  Plenty of people use the “learn as I go” approach when it comes to managing credit cards.  That has to stop.

Today we wanted to share a handful of things you can do to make sure you’re properly managing your credit cards.  Good credit can unlock some wonderful financial possibilities for you, but poor credit can really hold you back and hurt you in the long run.  Here are SIX habits that successful credit card holders have.

1. Monitor Your Statements

This first habit really should go for any type of account that you have.  Whether it’s an investment account, checking/savings account, credit card account, etc., CHECK YOUR STATEMENTS.  It’s incredibly important that you monitor monthly activity on these accounts.  It gives you the ability to make sure that your charges are accurate and there is no fraud happening on your account.  Make sure the charges are in the correct amount, payments are being processed, and you’re getting what you pay for.

2. Pay Credit Cards On Time and In Full

This is really a “best practice” habit.  The first part here, “on time”, is non-negotiable.  Whatever amount you are paying that month, make sure it is on time.  The second part, “in full”, is the ideal way to pay your monthly credit card bill when possible.  If you have the means to fully pay off your bill every month, do it.  At the VERY least, make the minimum payment on time.  One of the fastest ways to build a strong credit score is to make on time payments in full.

3. Track Your Expenses

Credit card expenses shouldn’t come as a surprise.  Make sure you know exactly what you are using your credit cards for, and how much you’re spending.  This falls right in line with just managing your overall monthly cash flow.  If needed, there are plenty of expense tracking apps nowadays that can help you keep track of everything.

4. Shop Around For Offers

A large portion of Americans don’t shop around for better offers when it comes to credit cards.  Different companies have different terms to their cards and different interest rates.  It’s worth taking some time to look for the best possible credit card for you. Compare fees, credit limits, grace periods, interest rates and more!

5. Establish a Budget

Similar to the ‘tracking your expenses’ habit, this habit should fall in line with the rest of your financial plan.  Having a set budget amount for your credit card each month is the best way to ensure that you don’t overextend yourself.  With a proper credit card budget, the odds of paying off your monthly bill in full skyrocket.  Can you see the snowball effect we’re building here?  All of these points build off of one another to help you increase your credit score.

6. Find Rewards

As much as credit card commercials like to tell you otherwise, you should NOT choose a card solely because of the “great airline miles or cash back”.  There are plenty of more important reasons (ie. Interest rates, fees, etc.) that should come BEFORE considering rewards, but that doesn’t mean they are completely irrelevant.  Tracking down a card that ties in to some of your spending habits can be a great way to complement your (hopefully) already great credit card habits.  Think about where you spend the most money, and try to find a credit card that rewards those types of purchases (if possible).

Household debt in America sits north of $14 trillion.  Don’t let yourself become one of those with high credit card debts.  There are easy ways to make sure you successfully manage your credit cards.  Turn your credit into a weapon in financial arsenal, not a liability you’re constantly fighting!

If you would like more guidance on how to properly utilize credit cards, give us a call!  We would be happy to speak with you.  You can click here to schedule an initial call with one of our team members.  There is no cost or obligation. 

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