When you first get a credit card, people often warn you about the dangers of not paying it off, missing payments, and ruining your credit score. Zagline is here to give you some healthy tips on how to avoid all these issues.
#1 Completely Pay Off Your Credit Card Bill Every Month
This may be easier said than done, but if you’re only using your credit card to buy groceries or pay for gas this is completely doable. Not to mention your credit score will thank you. Instead of paying back your credit card after every use, it’s recommended that you make a single big payment at the end of every month.
#2 Know What Hurts Your Credit Score and What Doesn’t
Staying below 10 percent of your credit limit is ideal. However, anything below 30 percent won’t hurt your credit score in most cases. Banks want to know you’re responsible and accountable so not reaching a high credit limit is a good indicator of just that.
#3 What You Need To Know About Making Big Purchases
The previous two steps warned about credit card payments and reaching a threshold of over 30% of your credit line. This doesn’t mean you can never use your credit card for big purchases. Depending on your credit limit this may mean plane tickets, a laptop, or a large piece of furniture like a hot tub. Contrary to the first statement, in the case of big purchases, it’s ideal that you make multiple payments to pay off your credit card bill.
#4 The Benefits, Deals, and Perks
By far one of the biggest benefits of having a credit card is the perks that come along with it. For example, you can get cash back on specific purchases and there are seasonal deals which may include airline points, hotel deals, and more. Each provider offers different starting promotions, seasonal promos and cash back in certain categories. It’s important to constantly check what offers are available so that you can take advantage of every deal out there.
#5 How Many Is Too Many Credit Cards
The average American is said to have a total of 3.1 credit cards. However, this doesn’t mean you should necessarily have 3 credit cards. It’s important to follow the one third percent rule, from tip #2. For example, if you have a credit card that you have been keeping under the 1/3 credit limit than it’s perfectly fine to go out and get another card. In this case, getting another card could increase your credit score. However, if you’re not able to pay back your credit cards in full or if are unable to keep your card/s under the 1/3 rule, getting another card will only hurt your credit score.