Best Ways to Use a Credit Card

A graph showing the different factors that effect your credit score: Length of history 15.0%, Amounts owed 30.0%, New credit 10.0%, Credit max 10.0%, and Payment history 35.0%

Between a lack of knowledge or a fear of causing themselves financial damage, most people have a rough relationship with credit. Many people were simply never taught how credit works. Others may have had bad experiences that damaged their credit score. That leads us to the question of the day, what are the best ways to use a credit card? I’m thrilled you asked.

The best way to use a credit card is to use it responsibly and pay off your balance in full each month. This will help you avoid interest charges and build your credit score.

Here are some tips for using your credit card wisely:

  • Make a budget and stick to it: Before you start using your credit card, make a budget and figure out how much you can afford to spend each month. Then, only use your card for purchases you can afford to pay off in full. This strategy is your best bet for avoiding interest. There’s no need to pay more money than you need to.
  • Track your spending: It’s important to track your spending so you can see where your money is going. This will help you make sure you’re not overspending and that you’re using your card for the right things. You’ll notice the running gag of everything enforcing the original point of making a budget.
  • Pay your bill on time: One of the most important things you can do to use your credit card wisely is to pay your bill on time each month. If you miss a payment, you’ll be charged interest and your credit score could take a hit. If you need to adjust your payment date, the majority of credit card companies let you set it to whatever you like. Use this to your advantage and set it so it coincides with a payday.
  • Use your credit card for rewards: Many cards offer rewards programs, such as cashback, travel points, or gift cards. If you use your card responsibly, you can earn these rewards and save money on your purchases. Easily my favorite thing. Stacking rewards for a little fun acts as a motivation for staying on top of your credit card use. Well, that and increasing your credit score of course.
  • Don’t carry a balance: If you can, avoid carrying a balance on your credit card. This means paying off your balance in full each month. You’ll be charged interest on your purchases if you carry a balance, which can add up over time. See, stacks on the budget point. You budget well so you never spend more than you can pay off which keeps you from carrying a balance. All combine to keep you from having to pay that dreaded interest.

By following these tips, you can use your credit card wisely and avoid debt.

Here are some additional tips for using your credit card responsibly:

Managing debt- Free downloadable guide. A hand is pictured in money, visualing drowning in debt.
  • Choose the right credit card: There are many different types of cards available, so it’s important to choose one that’s right for you. Consider your spending habits, your credit score, and the rewards that are important to you. This is honesty time. Be clear with yourself. If you plan on using this card to feed your sneaker habit, plan accordingly.
  • Shop around for the best interest rate: When you’re approved for a credit card, your interest rate will depend on your credit score and other factors. Shop around and compare interest rates before you apply for a card. This is in case you have a month where you can’t pay your card off in full. You don’t want to compound a missed payment with an astronomical interest rate.
  • Keep your credit limit low*: Your credit limit is the maximum amount of money you can borrow on your credit card. It’s important to keep your credit limit low so you don’t overspend. I know it feels counter-intuitive, but at the beginning of growing your credit, a low limit basically protects you from yourself.
  • Use your credit card only for emergencies*: A credit card should be used as a tool for convenience, not as a way to finance your lifestyle. If you can, avoid using your card for everyday purchases. Again, this is more for those beginning their credit journey/trying to rebuild credit. Minimizing how often you use your card helps keep down your card utilization. This can help you improve your credit score if you remain under 30%.
  • Make a plan to pay off your debt: If you find yourself carrying a balance on your credit card, it’s important to make a plan to pay it off as quickly as possible. There are many different ways to do this, such as the snowball method or the avalanche method.
  • Don’t close your credit card accounts: Once you’ve paid off your debt, it’s important to keep your credit card accounts open. This will help you maintain a good credit score. I know, I know, you probably feel like closing accounts will prevent you from spending too much. Unfortunately, the counsel of scores frowns upon such acts. Having multiple open accounts, in good standing, is actually the better way to go.

Following these tips, you can use your credit card responsibly and avoid debt.

The wrap-up

Using these tips will give you the best ways to use a credit card. It’s not so terrifying now, is it? Managing your credit card/credit score is a balancing act, but you can do it! You deserve financial freedom and the peace of mind of controlling your credit instead of it controlling you. Keep going. You got this!

Headshot picture of the writer of this article, Kenneth Medford III, with a muted black and white filter.
Kenneth Medford III

Writer, rhymer, gamer: the easiest way to define the man known as Kenneth Medford. I’m a simple man who loves to learn and loves to help and I wander the digital world trying to find ways to sate my hunger for both. Basically, I’m Galactus but helpful.

Check out my other work here or reach out to me on LinkedIn.

Learn more button links to for employees page.
We’re here to help you break free from the paycheck-to-paycheck cycle and navigate your financial journey, one day at a time. At Work gives you the tools to take control of your financial future.


Get it on Google Play button links to At Work on the Google store on android.
Get it on Apple Store button links to At Work on the Apple Store.
More Stories
What to Do with Stimulus Check?