How to Properly Use a Credit Card

February 24, 2023 by Partner Colorado Credit Union

Making purchases with a credit card is fast and easy. However, it’s important to make sure you’re using your credit card responsibly. When it’s used properly, it can help you build a good credit score. However, if a credit card is not used properly, it can have a negative impact on your credit score. Here are some tips on good and bad habits when it comes to using a credit card.

Good credit card habits

Making payments on time

When it comes to credit cards, the most beneficial habit you can start is making your payments on time every month. Late payments will result in fees, your interest rate possibly increasing and your credit score will take a hit. If you’re able, try to make more than just the minimum payment each month. Doing so will ensure you pay less interest over time.

Earning rewards

Many credit cards now offer rewards just for using your card. You can typically earn rewards like cash back, travel, merchandise and more. It’s nice to have a credit card with perks like these, so if you qualify for a rewards credit card, it’s to your advantage to get one.

Building good credit

Making frequent purchases on your credit card and paying them off, is the best way you can increase your credit score. The key is to not charge more than you can comfortably pay off, while making sure you never miss or make a late payment.

Credit cards can be used to establish, maintain or rebuild good credit. No matter where you’re at in your credit journey, a credit card can be a useful tool to improve your credit score, when used properly. There are many different credit card options available, find the best one to suit your needs. If you’re applying for your first credit card or wanting to repair your credit, a secured credit card may be your best option. With a secured credit card, your credit limit is determined by the amount of savings you pledge as collateral. The credit limit on a secured credit card is typically lower than the average credit card. The better your credit score, the more credit card options you’ll have available to you. Just another reason to make sure your credit score is good.

Tracking your spending

When using a credit card, it’s important to keep track of your spending. Since using a credit card is so convenient, it’s easy to overspend quickly. Often times you don’t even realize how much you’ve spent until you get your credit card bill at the end of the month. Don’t get caught in this cycle. Set a spending budget for yourself each month and check your credit card transactions regularly to make sure you’re not overspending.

Checking monthly statements

Be sure to check your monthly credit card statements for any errors or fraudulent charges you didn’t make. If you see an error or unauthorized charge, report it to your credit card company as soon as possible. Another option to monitor your credit card, is setting up instant notifications. You can receive emails or text alerts any time a transaction is made with your credit card. This is a great way to spot unauthorized charges quickly.

Bad credit card habits

Skipping payments or making late payments

Skipping a payment is one of the worst things you can do with a credit card. Making a late payment is another. Skipping or making a late payment can drastically lower your credit score. If you have trouble remembering to make your credit card payments, you can set reminders on your phone or set up automatic payments to make sure you never miss a payment.

Making only the minimum payment

By only making the minimum payment on your credit card, you significantly increase the amount of time it’s going to take to pay off the debt. Not to mention, the added amount you’ll end up paying in interest over time. It’s in your best interest to pay as much as you can each month, and pay more than the minimum payment.

Maxing out your credit card

Every credit card has a credit limit, which is the maximum amount of money you’re allowed to spend on a credit card. According to Experian, the average credit card limit is $30,365. Don’t look at your credit limit as an amount of money you have. It’s not. It’s an amount of money you have to pay back. When you make charges on a credit card, you only want to spend an amount you’re able to comfortably pay back. It’s also not a good idea to spend your entire credit limit because maxing out a credit card can have a negative effect on your credit score. You may also run into a penalty fee which can cause your interest rate to go up.

It’s important to monitor your credit so you know where you stand. You can get a free copy of your credit report from each of the three major credit bureaus, Equifax, Experian and TransUnion. As of right now, online access to your report is available on a weekly basis for free. Visit to get started. You can also check your FICO® Credit Score through a feature on Partner Colorado’s Mobile Banking App.

Whether you’re establishing, maintaining or rebuilding your credit, a credit card can be a useful tool, if used properly, to help your credit score. So be sure to create good credit card habits, and avoid the bad credit card habits.


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