Killer credit card tips

Want to avoid credit card nightmares? Your guides share some awesome suggestions.

CarlosMost people spend more when they use credit cards instead of cash, so it can be easy to drown yourself with credit card debt before you know it. We don’t want that to happen to you. Have a budget in mind before you spend and don’t spend what you can’t pay back.

OliviaRemember, when you use your debit card, the money is deducted directly from your checking account. But with a credit card, you’re borrowing the money. So again, before you charge, you need to think through how you’re going to repay.

CarlosTo keep your credit card spending under control, start out by selecting just one category to charge at first, like gas or groceries. Don’t add a new category until you’re sure that every month you can repay what you borrow.

OliviaAlso, try keeping your credit card balance below 70% of your limit and keep your credit card debt low enough so that your required payments are no more than 10% of your monthly income.

Credit card best practices

Look for low-fee, low-interest
Get a credit card with a low annual fee and low interest rate. Be sure to read your cardholder agreement. It spells out all the fees and finance charges. Call your card company’s customer service number if you have questions.

Pay off as much as you can
Always make at least the minimum payment each month, but pay as much as you can each month. Pay off the entire balance whenever you can. This will reduce the finance charges you pay.

Be sure you can afford it
Don’t use your credit cards to buy things you really can’t afford. Follow your spending plan.

Keep within your limit
Track your credit card charges throughout the month. If you stay within your credit limit, you’ll avoid overlimit fees and damaging your credit rating. Try to keep your credit card balance below 70% of your limit at all times. That will help you build credit by showing lenders that you can control how much credit you use, and it leaves enough credit available in case of an emergency.

Pay on time
Pay your credit card bills on time. This is one of the best ways to build good credit because it shows lenders that you’re reliable. It also helps you avoid late fees. Make sure you check your statement each month for the payment due date because it’s not necessarily the same date every time.

Avoid cash advances
Some credit card companies may offer you a cash advance. Avoid this option except in emergencies. You’ll be charged a fee and the interest rate is usually much higher!

Get debt help early
If you’re getting into trouble with debt, get help early. Contact your lender. Try to work out a repayment plan that works for both of you. You may also want to consider talking with a credit counselor, an experienced professional, who can help you get out of debt.

Click the Next button to learn how to read your credit card statement.