IIt’s a good idea to pay for everyday purchases with a credit card. Credit card payments are convenient, generally safer than cash or debit, and can be extremely rewarding. Plus, if you use your cards responsibly, you’ll build good credit.
The basics of using a credit card are simple: buy something with it, earn rewards equal to a percentage of your purchase, and then pay your bill when it arrives (ideally in full to avoid charges). interest).
However, you can personalize and optimize your credit card experience to get more value and security. Here are some tips to help you get the most out of your cards.
Balance alerts can help you track your spending
When you pay cash, it’s easy to know how much you’re spending when the tens and twenties disappear from your wallet. It’s not as easy to track how much you’re spending on a credit card (or debit card, for that matter), especially if you’re new to credit.
Many credit card companies, on the other hand, allow you to set up balance alerts, which send you an SMS, email, or in-app message when your balance approaches a preset threshold. You can set an alert when your balance reaches a certain threshold, such as $500 or 30% of your credit limit.
Budgeting tools can help with your spending
Most major credit card companies provide expense analysis tools that you can access through your online account. You select a period – a month, a year, or a custom period – and the tool displays how much money you’ve spent on your card in different categories. These categories are usually determined by the merchant where you spent your money – supermarkets, gas stations, restaurants and department stores, for example.
Mid-cycle payments can help improve your credit score
Each month, your credit card issuer sends information about your account to the three major credit bureaus. Your balance is an important piece of information that is reported because it is used to calculate your credit utilization rate. This percentage refers to the amount of your available credit that you are currently using. If you have a credit limit of $5,000 and a balance of $1,000, for example, your credit utilization is 20%.
Your credit score is heavily influenced by your use of credit. This is part of the “amounts you owe” category, which is 30% of your FICO score. In general, you should aim for less than 30% utilization, but the lower the better.
Shopping malls and bonus offers can make you a lot of money
If you’re a frequent online shopper, check to see if your issuer offers a bonus mall or card-linked offers where you can earn extra rewards. If you do this, you could get 10% cash back on a purchase instead of the usual 1%-2%. Alternatively, you could receive an immediate discount of $5, $10 or more. Some issuers give more importance to these options than others. To see what’s available, go to your transmitter’s website or app.
Changing your deadline can help you stay on track
It’s bad news if you don’t pay your credit card bill on time. You will almost certainly be charged high late fees, and since your payment history accounts for 35% of your FICO score, one late or missed payment can be disastrous for your credit. If your credit card’s due date falls at an inconvenient time during the month, whether because of your schedule or cash flow, ask your issuer if you can change it. You may be able to do this by going online or by calling your issuer.