1. Keep Your Credit Utilization Low

Don’t max out your line of credit. Carrying high balances in relation to the total line of credit can negatively impact a person’s credit score. Ideally, the balance should be less than 50 percent of the total line of credit at any given time. High balances also lead to increased interest payments if the balance is carried over month to month and not paid off.

2. Use a Secured Credit Card to Build Your Credit

Using a credit card is an effective method to build your credit. If you don’t have credit yet, getting a loan is often difficult. However, you have the option to get a secured credit card and use this to start building your credit record. Make sure to be diligent and prompt in making payments, as this will greatly affect your credit score.

3. Pay Off Your Card Each Month to Maximize Rewards Value

If you get a rewards card, but carry a balance, the interest you pay will cancel out the rewards you earn. A free plane ticket worth a couple hundred bucks isn’t worth carrying around thousands in debt for a few years as interest snowballs. So, if you go the rewards route, commit to paying in full. If you can’t do that, it’s best to just get a low-interest credit card instead.

4. Pay Off High-Interest Credit Cards First

Accumulating credit card debt with high-interest rates is bad debt that should be paid off fast. The best way to do this is to create a plan and time frame to help you stay on track to debt repayment. Make sure to get rid of your high-interest debt first while still paying the minimum payments on other debt, as it has more of an impact on your savings and credit score.

5. Stay Away from Cash Advances

Credit cards should not be treated as a bank account that you can get cash from whenever you need it. Stay away from cash advances because they can be very costly when it comes to fees. Also, most card issuers start charging interest for cash advances as soon as you make the transaction, with no grace period.

6. Use a Personal Finance App to Monitor Your Credit Usage

To help monitor and control your credit card usage, use a personal finance app on your cell phone that tracks, in real-time, your purchases by category. This shines the cold, hard light of reality on the cumulative effect of all those “harmless” little charges and can help keep you “on budget.” There are several of these tools available at relatively low cost.

7. Use Online Reporting from Your Credit Card to Monitor Spending Habits

It’s critical to keep track of your spending habits, control your expenses, and avoid getting into debt. Most credit card issuers allow you to view your transactions online for easy monitoring. This allows you to analyze your spending habits and make adjustments when you need to.

8. Don’t Share Credit Card Accounts with Your Spouse

There is usually minimal benefit to having multiple cardholders on one account. One partner can have spending problems, obtain limit increases, or incur debt, and the other partner will also be liable for this. This can often result in problems in the marriage. Spousal cards can limit the available options to deal with the debt, both while together and if the couple separates.

9. Be Careful with Promotional Offers

Credit card companies use promotional offers to bring in new customers or to make their existing customers use their credit cards. While some of these promotional offers may be beneficial to the users, you should still be careful and ensure you understand the terms thoroughly. Also, don’t fall into the trap of making unnecessary purchases just because there’s a “special offer.”

10. Refrain from Using Charge Cards

Charge cards have no preset spending limit. They allow you to make purchases and pay back the entire amount each month upon the due date. Failure to do so will incur heavy fees. Also, charge cards will reflect maxed out utilization on your credit report and can lower your credit score. Using credit cards is better for your credit and the set credit limit allows you to control your spending.

11. Never Make Late Credit Card Payments

Always make sure that you pay your bills on time. Be mindful of your monthly due date and never pay your bills late. Making late payments will result in late payment penalties, interest charges, and a bad record on your credit report, which will affect your credit score.

12. Take Advantage of Any 0% Credit Transfer Balance

If you need to clear your credit card balances but can’t afford to do it in one lump-sum payment, you can take advantage of any zero percent interest balance transfer program. This program allows you to transfer the outstanding balance on one credit card to another credit card that’s offering zero percent interest for a period of, for example, 12 months. This helps you pay off your other balances one month at a time.

13. Understand the Card’s Terms & Conditions Before Applying

Before you choose any credit card, make sure that you understand the card issuer’s terms and conditions. Read the fine print and ensure that the fees, interest rates, penalties, rewards, and protection against fraud are clear to you. If you don’t understand something, don’t hesitate to ask the issuer.

14. Use Collateral to Increase Your Credit Limit

Put up collateral if this can help increase your credit limit. This allows the issuer to feel more confident in giving you credit. Also, watch your usage versus your credit limit. This is a big problem for people who get their first credit card. Normally these limits are relatively low. For instance, if you get approved for a $1,000 credit limit and use up this amount monthly, although paid in full, your credit usage is at 100 percent, and this will lower your credit score over time.

15. Review Your Credit Reports

Get free copies of all three of your credit reports, since the information can vary per report, and review them carefully. Make sure all the information in each of your credit reports is accurate. Report inaccuracies and have them corrected as soon as possible. You can also file a complaint with the CFPB if the error in your credit report is not corrected after a reasonable amount of time.

16. Report a Lost or Missing Credit Card Immediately

If your chip credit card is missing, lost, or stolen, you should report it immediately, else you can be liable for charges if the card (via the chip technology) was present at the transaction. Credit card companies are using the chip in credit cards to mitigate risk. If you don’t report the card missing or stolen and it is used, you can be on the hook for the charge. Most consumers don’t know this.

17. Sign Up for Automatic Payments

Your payment history comprises 35 percent of the total credit score and is one of the most important credit scoring factors. According to FICO, past long-term behavior is used to forecast future long-term behavior. One of the best ways for consumers to improve their credit score as a whole is to make on-time payments. If you’re having difficulty making timely payments, automation is key. Automation takes away the emotions and human error involved in the process.

18. Be Wary of Making Online Financial Transactions on Public Internet Connections

Coffee shops, hotel lobbies, and other convenient Wi-Fi providers will offer free Wi-Fi in their common areas, but these aren’t necessarily properly secured and could leave you open to identity theft if you are using your phone or computer to engage in any financial transactions with a credit card. If you must do more sensitive transactions using public connections, make sure they are secured (i.e., use https:// instead of http://). For further protection, consider setting up a VPN (virtual private network), a software that will mask your identity and location. So if you’re using a public Wi-Fi, you’ll be, in essence, disguised and less likely to be picked up by those seeking to prey on users of that particular network.

19. Heavy Travelers Should Use a Travel Rewards Credit Card

If you’re a heavy traveler and are looking for a premium card with benefits like free TSA Pre-Check and airport lounge access, the Chase Sapphire Reserve and American Express Platinum cards have big benefits. Heavy travelers are able to use their benefits in a way that saves them money. You can put all of your normal spending on credit cards, so you can earn a couple of free vacations each year for the money you are already spending.

20. Use It for Convenience, Not a License to Spend

The best way to use a credit card wisely is to use it for convenience, not as a license to spend. Never carry a balance on an account. Charge only what you can pay off in full, and on time, every month. Making this a habit will save you on interest, fees, and stress over the course of a lifetime. Live within your means to minimize financial stress. Leave as much room on your credit as possible, keeping utilization low, and plan on keeping a card for a long time to help credit scores.

21. Use Credit Cards to Build & Increase Your Credit Score

One great thing about credit cards is that if you use them responsibly, it will help increase your credit score and open up better credit options. Stay debt-free by paying off your balance each month. If you have bad credit or no credit, consider getting a secured credit card to build your credit without the risk of increasing your debt.

22. Stop Using Credit Cards Until They Are Paid Off

If you are new to credit, make sure you don’t add more to your credit cards than you can pay off that month. If you have already fallen into the debt trap, you should stop using your credit cards until they are paid off. Once you have paid off your credit cards, use them to purchase things you would normally purchase with cash or a debit card.

23. Credit Cards with Enforceable Spending Rules

There’s a new type of credit card: rules-based cards. Set budgets, time limits, and merchant restrictions on each credit card and set them to deactivate if the rules are broken. This allows you to keep your employees accountable and easily track expenses with no need for reconciliation reports. Easily configured to be used with travel, meals, perks, and vendor payments.

24. Avoid Credit Card Schemes

Every time you give your credit card to a merchant, they can insert your credit card into a small machine where they can get your card’s information from the magnetic strip. They can use this information to make fraudulent transactions. Be careful when giving your credit card to a merchant, and as much as possible, always supervise them when they swipe your card to prevent this kind of scheme.

25. Create a Budget & Stick to It

Creating a budget will prevent you from making impulsive purchases. You can start by outlining your regular monthly expenses. You can use your credit card to pay for some of those expenses so you can build our credit and earn rewards, but be careful not to use more than what you need to nor more than what you can afford to pay back.

Bottom Line

It’s important to know how to use a credit card wisely to enjoy its many benefits. A credit card can help build your credit, lets you enjoy perks and rewards, and offers convenience in paying for your bills and purchases. Make sure to use the above credit card tips from the pros to ensure you get the most out of your consumer credit cards.