Take Control of Your Credit Card Use to Better Your Finances

By Selena Garrison
credit card use

We have all heard the dangers of credit card use. You probably have a friend who has a wild amount of credit card debt or you may have even found yourself in that position. There are entire companies whose sole purpose is to help people get out of debt — and they make a lot of money doing so.

March is Credit Education Month, which aims to educate people about the importance of building a positive credit profile and how to work toward a good credit score, according to National Financial Educators Council.

Inappropriate credit card use can be a slippery slope leading to excessive debt and lots of headaches, but there are several great ways to use credit cards that can really help you in the long run.

Credit Card Tips

First, appropriate use of credit cards can boost your credit score, which can lead to better buying power in the future. When you use your credit card and pay it off every month, you are building your credit history and improving your credit score. This helps you qualify for loans and save on interest for big purchases in the future, like a car or a house.

Second, with identity theft running rampant, using your credit card instead of your debit card can provide you with added security. While both your credit and debit card information can be stolen and used fraudulently, with a credit card no money actually leaves your bank account. That means that you can still pay your bills while waiting for the situation to get sorted out. Using your card for booking rental cars and hotel rooms also keeps your bank account from getting hit with big holds that are sometimes placed by these types of businesses.

Lastly, if you are going to use a card and you are going to be responsible with it, rewards programs can really benefit you! Many cards have rewards that range from cash back on purchases, gift cards, travel miles, hotel rooms and more. The key to cashing in on these rewards is to always pay off your card at the end of the month so that you aren’t paying interest. If the amount you are paying in interest outweighs the “free” goodies you are receiving, then you are not doing yourself any favors.

Win the Credit Card Game

When playing the credit card game, it is so important to know how to win! Winning means boosting your credit score, protecting your identity and getting all of the perks without paying the interest. Remember, credit cards are not a way to get “free money,” but when you use them correctly, they can definitely benefit your financial life.

Protect Yourself

  1. Pay off your card every month to avoid paying interest on your purchases.
  2. Do not use your credit cards to supplement your income (thus spending more money than your make.)
  3. Prevent identity theft by choosing strong passwords for your online financial accounts and password protecting your mobile devices.
  4. When shopping online, DO NOT use your debit card, and only use your credit card on trusted sites.
  5. Regularly monitor your credit report. Legally, you can receive a free copy from each credit reporting agency (Equifax, Experian and TransUnion) each year through Annualcreditreport.com.

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