People use credit cards in many different ways, and that’s because credit cards offer a convenient and flexible way to make purchases and finance expenses. Did you know there is a right way to use them?

Start with the right card.

It’s hard to have a great experience with a credit card that doesn’t suit you, so do your research and compare cards to match features to your lifestyle. For example, if you need to transfer balances, look for one that comes with no balance transfer fees – or if you like cash back, then look for a card that rewards you for the way you use a credit card.

Make the right payments.

When at all possible, pay off the entire balance in full, only carrying a balance when absolutely necessary, such as when you’ve made an unusually large purchase. In that instance, make a plan for paying down that extra balance as quickly as possible. It’s also important to make your monthly payments on time. When you keep to these two payment strategies, your credit score will thank you.

Watch your balance.

Maxing out your credit card to its credit limit isn’t just stressful; it’s also bad for your credit because you’ll be seen as a high-risk borrower. Try to only utilize about 30% of your available credit to keep your credit score in tip-top shape.

Take advantage.

Just using a credit card actually helps boost your credit score because it shows creditors that you know how to manage a credit account. Taking advantage of a variety of credit types is also beneficial. This means that in addition to having a credit card, which is a revolving credit account, it’s good to show you can also manage term loans like an auto loan, a personal loan, and even a mortgage. By utilizing the credit you have available to you, you can build a good credit history, develop strong money management habits, and ultimately even qualify for better financing rates, higher credit limits and more flexible loan options.

Have any questions about credit cards? Give us a call at 626.351.9651 or to choose the best credit card for you visit mypsfcu.org/credit-cards.

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