7 Steps to Use a Credit Card Wisely


Nick Fitzgerald

Last Updated 01/13/2025

From earning rewards to boosting your credit score, credit cards offer many benefits—but it’s important to use them responsibly. Here are seven steps for doing exactly that.

1. Understand your credit card terms

Carefully read your credit card’s terms and conditions. Make sure you understand the interest or annual percentage rate (APR), fees, and any rewards programs linked to the card.

2. Follow a monthly budget

Before you use your credit card, make a list of your expenses. From there, create a budget and stick to it. Only use your credit card for purchases you can pay for in full.

3. Cover your entire balance each month

Try not to carry a credit card balance from month to month. This will allow you to avoid paying interest. It’ll also help you steer clear of debt and improve your credit score.

4. Pay your bill by the due date

Make credit card payments on time to avoid any late fees or penalties. Consider setting reminders or scheduling automatic payments.

5. Monitor your credit card activity

Review your credit card statements and transactions on a regular basis to check for errors or unauthorized charges. If you spot suspicious activity, report it to your card issuer immediately.

6. Maintain a low credit utilization rate

Credit utilization is the amount of available credit you use on your credit cards. Keep that number below 30% to protect your credit score.

7. Take advantage of your card benefits

Research your card benefits and rewards—and use these programs to earn cash back, points, and more. Some credit cards even offer purchase protection, travel insurance, and extended warranties.

These are just some of the ways to avoid common credit card pitfalls. Reach out to your card issuer if you need clarification.

Learn more about responsible credit card use

Please contact us with questions or for more information on credit card best practices.