5 Tips for Using Credit Cards Responsibly

Credit cards can be awesome. Suddenly, you have the capability to go out and spend money you don’t even have. Although it may be tempting, credit cards are not for reckless and excessive spending. Instead, they teach you about financial responsibility and can help you build a good credit rating—if you use them responsibly. Here's how to start.

  1. Use the card cautiously

Especially in the beginning, use your credit card for necessary purchases only. Don’t spend more than you know you can afford. Monitor your purchases wisely and buy only those items you need, not want. Also, consider that one day you may need your credit card for an emergency situation, so you may want to remain well below your credit limit.

  1. Pay the full balance due each month to avoid interest

Interest rates can seem daunting, but if you pay your bill in full before your monthly due date, you won’t have to worry about interest! If that’s not an option, at least pay the minimum payment due to avoid late fees. Resist the temptation to spend more than you can pay in any given month. Not "biting off more than you can chew" is the basis for credit card responsibility.

  1. Avoid skipping payments

Pay your bill every month on time. In those months in which you prefer to pay less than the balance, pay as much over the minimum payment due as you can and make sure the creditor receives it by the due date. If you can't increase your monthly payments or want to reduce your balance quickly, try to use your card less.

  1. Use the credit card as a budgeting tool

As you become more comfortable using and paying off your balance each month, try using your account as a budgeting tool. By checking your account activity online or through your monthly billing statements, you can see exactly how much you've spent at the end of the month.

  1. Watch for suspicious activity

Credit card fraud and theft are inherent risks of having a credit card, but you can decrease the risks just by being aware. Understand your credit card provider's security policy and the card's security features. Always report fraud or suspicious activity on your card immediately. Monitor your statements, whether online or paper. Report and replace lost or stolen cards immediately.