How to Manage Your Credit Cards Responsibly

Credit cards are a powerful tool that can help you build credit and help protect you from fraud when you use them for online purchases. While credit cards are an asset if you can use them, they can become a liability and even dangerous if you’re not careful. If you are thinking about opening a credit card, here is how to manage your credit cards responsibly, so you don’t make these same money mistakes.


How to Manage Your Credit Cards Responsibly


I want to start off by saying that there is freedom to debt-free living. We have always lived with the mentality that you only buy what you can afford. That said, we do often use credit cards for purchases because of the security they provide. 

Living debt-free while using credit cards means that you are paying off the balance in full every month. When you live debt-free it means you get to keep more of your income. You aren't paying any extra of your hard-earned money towards interest. You also are able to live without the burden of financial stress. I will always give you the advice to live debt-free as much as possible. Always.

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Pay off your balances 100% of the time

If you use a credit card, you must pay it off before your payment period. Doing this will help ensure that you don’t carry a balance each month. Having a balance can cause your credit score to go down, and you will end up paying more money to pay that off in the future because of interest.

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Check over your statements and bills

Check over your credit card statements and pending charges to ensure that these were all things you purchased. Compare these to your receipts to make sure that the charges are correct and that you catch any fraudulent purchases before things get too out of hand.

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Pay more than the minimum amount

If you are paying off your balance each month, this won’t be an issue. However, there may come a time in your life when you will need to carry a balance. If this happens, it’s essential to pay more than the minimum amount. Just because you have a minimum balance doesn’t mean that it’s all you should pay. Paying more will help you pay off that debt quicker!

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Don’t max out your credit card

Just because you have a large credit allowance doesn’t mean you should go and spend that every month. Know what your credit card limit is and do your best to stay well below that credit limit. This will not only help your credit score but keep you from racking up debt or getting your card declined because you’re out of spending.

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Use a rewards credit card

If you are using credit cards, look for one that has a good reward on it. This could be everything from travel miles to cashback. When you use your credit card for regular spending and then immediately pay it off, you earn cash back and other rewards for using the money you were already going to spend anyway!


Regularly ask to raise your credit limit and to lower your interest

If you have been diligent about paying off your card and keeping yourself in good standing, call up your credit card company! Sometimes, they will raise your credit limit or lower the interest to reward your good spending behaviors. Raising your credit limit can help your credit score, and reducing your interest payment can help save your butt if you ever have to carry a balance.

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Credit cards are a tool that can help you on your financial journey, but you must treat them as such. They are not made to pay for things you can’t afford, but rather a tool that can help you be better with your money.


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