5 Tips on How to Use a Credit Card Responsibly

5 Tips on How to Use Credit Cards ResponsiblyA credit card offers you access to money you don’t necessarily have. Because credit cards are a convenient way to pay, it may be tempting to use your credit card(s) for everything. However, excessively swiping your plastic card can lead to serious trouble. Instead of only viewing your card as a form of payment, your credit card can be a tool to teach you more about financial responsibility. This tool can also help you build a good credit score—if you use it correctly. 

However, the key to being a responsible cardholder is much more than simply paying your annual fee and making a payment towards your credit card balance at the end of each cycle. On top of responsibility, you must also have self-control, discipline, and good budgeting habits. Read below to learn five credit card tips for being a responsible cardholder.


1. Be picky with your purchases

When you first get a credit card, it is easy to fall into the trap of swiping, tapping, or inserting your card for every purchase. For example, you could buy a new handbag, pay for gas, shop for new shoes, get some school supplies, score tickets to a game, purchase groceries, and go out to dinner with your friends all in the same month. Even though you did your best to spread your purchases throughout the month, those expenses would likely show up on the same credit card statement– potentially making the credit card bill more than you can afford this month. 

Try to be selective when paying with your credit card to avoid situations like these. Using your card for wants-- like the handbag, new shoes, or fancy dinner– is not the most responsible. Instead, you should reserve your credit card for buying your needs, such as gas and school supplies.

Also, credit cards affect more than just the present; you should keep the future in mind when using your card because you never know when you'll need to be prepared for an unexpected emergency. It is always a good idea to remain well below your credit limit. Your credit limit is the maximum amount of money a credit card lender will allow you to borrow at once. Additionally, if you remember that credit bureaus will provide your credit history to other lenders you may utilize in the future, you will be more likely to make the right decisions with your credit card now.



2. Aim to pay your full credit card balance every month

Each month, you will receive a credit card bill. This statement has the transactions you made throughout the month and the total amount owed to your credit card issuer. This total is known as the credit card balance. Each time you get a statement, you can pay off the balance entirely, the minimum monthly payment required by your credit card company, or any amount in between.

Whenever possible, you should try to pay your entire credit card balance before the due date. If you pay your bill in full, you avoid carrying a balance, ensuring you won't have to pay interest charges on purchases you made. Without these extra charges, you will be less likely to accumulate credit card debt. There may be some months when you might not be able to afford your entire bill. If this is the case, you should try to pay at least the minimum payment due in order to avoid late fees. Each time you aren't able to pay the entire statement, the rest of the balance will transfer to next month. 

A poor payment history can reflect on your credit report, preventing you from being granted a credit line increase. Credit line increases are helpful when you expect an increase in your expenses. For example, college students who have recently graduated may need to raise their credit limit to accommodate their lifestyle change. That's why you should only use your credit card for what you know you can pay off whenever possible.


5 Tips on How to Use Credit Cards Responsibly 2

3. Avoid skipping payments

When life gets busy, credit card payments are easy to forget. Plus, if you’re managing multiple financial accounts, it’s easy to confuse which bills are due when. Unfortunately, the issue is all the same to credit card companies, whether you skip your monthly payments on purpose or by accident. If you can’t afford to pay your entire bill on time, you should pay as much as you can, even if the amount you’re contributing seems insignificant. Making a partial payment on time is better than paying nothing at all when it comes to managing a credit card account. 

Automating your payments is one way to guarantee your bill gets paid on time. You can set the date for your payment to come directly out of your bank account on or even a few days prior to your due date. However, you don’t want to get too comfortable. If you don’t have to log in to your credit card account to pay your bill, you may become a little add-to-cart happy, which can lead to spending more money than you can actually afford. 

Besides the debt you could accumulate if you start to miss payments, there are other financial consequences that can occur. As you know, credit scores are used to determine interest rates and renter credibility. The higher your credit score is, the easier you will be able to secure more favorable interest rates and terms on any loans you try to borrow. However, it only takes one missed payment to potentially affect your credit score. In the interest of your future financial self, it’s best to take preventative measures to avoid missing a payment.


4. Use the credit card as a budgeting tool

Not only can you use your credit card to track your spending, but it can also help you stay on top of your budget. Some credit card issuers classify your purchases in respective categories, allowing you to view a detailed spending report of all your transactions. Visually seeing how much money you spent on gasoline, restaurants, travel, medical services, merchandise, and more can allow you to track and monitor your expenses straight from your credit card statements. 

It’s a good idea to set a spending limit on your card that is lower than your credit line. Some responsible credit cardholders aim to keep their credit utilization ratio at 30% or lower. Credit utilization is the amount of credit you use currently divided by the total amount of credit you have available. Keeping your balance a healthy distance below your credit line makes it easier to pay your statement in full each month! 

When you become more comfortable with your credit card, you should try using your account as a budgeting tool. If you have a rewards card, your credit card may offer more rewards as you build your credit. It’s surprising how easy tracking your finances can be when you budget with a credit card.  


5. Watch for suspicious activity

Dealing with credit card fraud and theft are inherent risks of having one, but you can decrease these risks just by being aware. You should understand the security policy set by your credit card provider and the security features of your specific card. Always report fraud or suspicious activity on your card immediately. You can actively watch for fraudulent activity by monitoring your credit accounts each month.

You can protect your credit accounts by keeping an eye out for all unfamiliar transactions and deposits, regardless of the dollar amount. Be sure to report and replace lost or stolen cards immediately. Identity theft and fraud are scary, so make sure you’re paying close attention and not leaving your credit card information where others can see it and take advantage of it. 


Being a responsible cardmember is one of the most important aspects of having a credit card and managing your personal finances. However, if you're ever in a bind, one purpose of a credit card is to help pay for college expenses. As long as you make your payments on time and pay any fees, you shouldn't be afraid to use your credit card if you're running low on cash or are in-between paychecks. Being a cardholder can be intimidating initially, but if you follow these tips and attempt to use your credit card wisely, it should be a breeze!


credit card college expenses learn more cta visa