Getting the Most Out of Your New Credit Card

Approved for Credit Card

You just got approved for a credit card. Congratulations! Using a credit card responsibly is a great way to help build your credit. But if you’re working to get an elite credit score of 800 or better, you’ll need to know how to use a credit card wisely.

Here are our top tips to get the most out of your new credit card and how to get closer to that 800 credit score.

Know What You’re Getting Into

Hopefully, you didn’t apply just for the free t-shirt or one-time in-store discount. If you did, you’re more likely to cancel the card as soon as you receive it, and canceled accounts hurt your credit score.

If you didn’t read the fine print before you applied, do so now. Some things to check:

  • Do you have an introductory low interest rate? If so, when will the interest rate change?
  • What are the conditions for the promotions and special offers?
  • Is there an annual fee?
  • Are there any balance transfer fees?
  • Will you be charged for a foreign transaction?

Don’t Pay Interest

Pay off your credit card in full every month. You’ll avoid interest charges, and it reflects highly on your credit report.

Build Your Credit, Not Your Debt

Use your card frequently, but don’t overuse it. Frequent credit activity helps establish good credit, but increasing debt destroys it. It can be a fine line, but what it boils down to is this: if you use your card each month and pay it off each month, you’ll build good credit. If you use your card each month and pay off a smaller percentage of your debt each month, you’ll hurt your credit.

If you want to hit that elite credit score of 800, you’ll need to avoid carryover debt from month to month.

Take Advantage of Rewards and Perks

If your credit card comes with rewards and perks, you may as well take advantage of them — if it makes sense to. Read the fine print, because not all rewards are worth it. Some cards only give you rewards if you spend a certain amount of money, or make a certain kind of purchase. If you’re spending more on purchases than you normally would, just to get a reward, you’re losing money and increasing your debt.

Also, pay attention to deadlines. You don’t want to make that last qualifying purchase three days after the deadline! Know ahead of time if you’ll be able to take advantage of the promotions or rewards without getting into trouble.

Don’t Apply for More Credit Cards

You’ll get a your credit score closer to 800 if you diversify your types of credit. There’s nothing wrong with having multiple credit cards, but taking out too many credit cards indicates that you’re relying on debt to get through, month-to-month.

On the other hand, if you stay in good standing on multiple lines of credit — a mortgage, a couple credit cards, and a student loan — you’ll give a fuller picture of your reliability.

Reaching an 800 Credit Score

If you follow these tips for getting the most out of your credit card, your credit score will start to reflect it. Want to learn more about building your credit? Wondering how to get an 800 credit score? Contact our credit repair experts today.

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