In total, Americans owe over $1 trillion in credit card debt.
Consumers between 35 and 65 years old have the most credit card debt. However, adults of all ages are falling into credit card debt.
Credit card debt can haunt you for a long time. Using a credit card responsibly, however, will improve your financial standing. You owe it to yourself to establish good credit card habits.
Here’s what you need to know about how to use a credit card responsibly:
The credit limit is the maximum balance you can use on a credit card.
Knowing how to properly use a credit card means never maxing out your credit limit. Experts think you should only use 30% of your credit limit or less.
If you feel tempted to make large purchases, call your credit provider and ask them to reduce your credit limit.
The best way to use a credit card is to buy things and make full payments on time.
After you make a purchase with your credit card, there’s a grace period of 20 to 30 days before you start accruing interest. Then you can make a minimum payment, partial payment, or full payment.
Paying the balance in full and on time increases your credit score. This also helps you tackle debt by avoiding interest, fees, and penalties.
Not making payments on time (or at all) will make your credit score decrease. Read more here about getting a credit card when you’re in an unfavorable credit situation.
Keep track of payment due dates with text alerts.
Track Your Charges
Anyone who knows how to manage a credit card tracks their charges. It’s one of the frugal habits every credit card user should have.
Record how much money you’ve charged to your credit card. Keep a running list of everywhere you’ve used your credit card.
Go through your credit card statement every month. Make sure each charge is correct. A cashier might’ve charged you double for something.
Look for large or unusual charges. Someone could’ve made a fraudulent charge.
If you spot any errors, call your credit provider and dispute the charges.
Keep Your Credit Card Safe
Always keep your credit card in a safe place. Never place your credit card where someone could grab it.
Never lend your credit card to others.
If your credit card is lost or stolen, report it immediately. Your credit provider will handle the situation.
Learn How to Use a Credit Card the Right Way
In the United States, the average household with credit card debt owes $6,929 in revolving balances. Knowing how to use a credit card carefully will help you avoid debt.
About 1 in 11 people with credit card debt don’t think they’ll ever be free from it. Credit card debt is a burden. Life is less stressful when you’re not in debt.
Get your finances back on track and use this nifty online toolkit. You’ll be surprised by how many resources are at your disposal.