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6 Tips on Using Your Credit Card Responsibly

Credit cards can be some of the best tools to reach your financial goals. Fraud protection helps keep your money safe, and earning rewards can help you save more, with free travel, gift cards, and cash back into your bank account. But like any tool, it’s important to use credit cards responsibly. Here’s how to make the most of the plastic in your wallet while being smart with your money.

Someone pulling a credit card out of their wallet.

Pay your bill on time every time

Late payments hurt your credit score, and they also cost you late fees and interest on your unpaid balance. Paying your bill on time every month is an easy solution to that. To get bonus points in financial responsibility, set up auto payments from your financial institution’s online bill pay. That way, you’ll never miss a payment out of forgetfulness. 


Only spend money you have 

It can be tempting to overspend or borrow against future paydays when you’re spending with credit. But by only spending money that you already have in your bank account, it keeps you spending more responsibly. You can treat your credit card like a debit card, never letting your balance go above the amount you have available in your checking account. 

You can also easily make multiple payments throughout the month, especially when your credit card is linked to your bank account. This can keep your balance from creeping up without you noticing. 


Woman using her credit card online.

Pay off your balance in full 

When you get your credit card bill each month, it can sometimes come with a bit of sticker shock. While it’s easy just to make the minimum payment and ignore the interest that accumulates from month to month, that’s not a good strategy to save money and grow toward your financial goals. When you’re only spending money you have in your bank account anyway, it just makes sense to pay off your balance in full each month. That way, you won’t pay interest on purchases. 


Stay well below your limit 

It’s not a good feeling to have your credit card declined at the register because you maxed it out. And it also isn’t good for your credit score. Your credit utilization ratio calculates the amount of credit you have available relative to how much you’ve used. Be sure to keep your spending well below your limit to keep your ratio (and your credit score!) looking good. 


Someone making a purchase with a credit card

Check your statement regularly 

You get your statement in the mail or electronically once a month. But it’s a good idea to check in on your transactions through online banking more often than that. Look through your transactions and check for fraudulent payments: they might be duplicate transactions or ones with businesses that you don’t recognize. If you see something amiss, reach out to your financial institution’s fraud line to report it right away.


Maximize rewards earnings 

Paying with cash or a debit card can both have their own advantages. But one of the biggest financial advantages of using a credit card is the ability to accumulate rewards points to use toward your next vacation, grocery shopping trip, or gas fill-up. Rewards cards come in many forms. Some, like the VISA Platinum Rewards Card from RMCU, give you the option to choose what type of rewards would work best for you.

When you’re ready to upgrade your finances, apply for your new credit card through RMCU, and see where your rewards can take you.

Non RMCU links are being provided as a convenience and for informational purposes only; they do not constitute an endorsement or an approval by Rocky Mountain Credit Union of any of the products, services or opinions of the corporation or organization or individual. RMCU bears no responsibility for the accuracy, legality, or content of the external sites.

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