• Money Matters
  • Banking 101

5 Tips for Using Credit Cards Responsibly

Credit cards are not just for buying things. They can also help you build a good credit rating—if you use them responsibly. Here's how to start.

1. Pay the balance due each month by the due date.

Pay the balance due each month by the due date to avoid interest or pay at least the minimum payment due to avoid late fees. Resist the temptation to spend more than you can pay in any given month. Not "biting off more than you can chew" is the basis for credit card responsibility.

2. Avoid skipping payments.

Pay your bill every month on time. In those months in which you prefer to pay less than the balance, pay as much over the minimum payment due as you can and make sure the creditor receives it by the due date. If you can't increase your monthly payments or want to reduce your balance quickly, try to use your card less.

3. Use the card cautiously.

Especially at the beginning, use your credit card for necessary purchases only. Excessive spending may lead to monthly payments that are more than you can afford. Consider that one day you may need your credit card for an emergency situation. Monitor your purchases wisely and buy only those items you need, not want.

4. Use the credit card as a budgeting tool.

As you become more comfortable using and paying off your balance each month, try using your account as a budgeting tool. By checking your account activity online or through your monthly billing statements, you can see exactly how much you've spent at month end. If you're able to pay the balance due each month by the due date, you're on your way to becoming a responsible credit card user.

5. Protect yourself from credit card fraud.

Credit card fraud and theft are inherent risks of having a credit card, but the risks can be mitigated by your vigilance. Always report fraud or suspicious activity on your card immediately. Monitor your statements, whether online or paper. Report and replace lost or stolen cards immediately. Understand your credit card provider's security policy and the card's security features.

What's Next?

Learn more about credit cards in Credit Card Basics.

Check out 6 Tips for Managing Your Money in College for ways to create and stick to a budget.

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