![\"shutterstock_377568142\"](\"https:\/\/www.creditrepair.com\/blog\/wp-content\/uploads\/2016\/02\/shutterstock_377568142.jpg\")
<\/p>\n<\/p>\n
Credit cards are a great resource when building your credit. Sure, they let you finance purchases and pay them off later, but they provide a much more valuable service \u2014 they allow you to build your credit file and establish a reputation as a responsible credit holder, which in turn can help you to qualify for loans, obtain better interest rates, and appear as a low-risk consumer whenever a credit check takes place.<\/p>\n
Of course, credit cards must be managed responsibly to really benefit your credit and keep you in good financial standing. Follow these best practices and make them a habit to get the most out of your credit card usage.<\/p>\n
Pay On Time<\/em><\/strong><\/p>\n Of course, you have to make your monthly credit card payments on time. The consequences of late payments can include late fees, jacked up interest rates, and black marks on your credit report. Despite all this, it can be very easy to let a payment slip through the cracks.<\/p>\n To avoid missing a due date, you can set up automated payments to draw from your bank account on a monthly basis. If you aren\u2019t comfortable with that, you can at least set yourself an automated notification on your phone, email calendar, etc. to remind you to make a payment on time, every month.<\/p>\n Pay the Full Balance<\/em><\/strong><\/p>\n Sure, the minimum payment is enough to get by \u2013 and when you\u2019re faced with other bills, the credit card may take lower priority. But the more you put toward your credit card balance each month, the less you end up being charged in interest in the long run. In this way, you\u2019re actually saving yourself money by paying more now. What\u2019s more, you\u2019ll be able to pay down that balance even faster.<\/p>\n In fact, the absolute best way to use a credit card is to only charge what you can afford, and pay it off in full each month before the interest hits. This way, you never have to pay interest and you can still build your credit.<\/p>\n Maintain No More Than a 30% Utilization Rate<\/em><\/strong><\/p>\n One major factor that goes into your credit score is your debt utilization. If you have a good portion of your credit card limit tied up with a card balance, this can damage your credit score and appear as a red flag to lenders.<\/p>\n It\u2019s a good best practice to utilize no more than 30% of your credit card limit at any given time. This way, your utilization ratio won\u2019t damage your credit score, and you have some wiggle room on your credit card in the case of an emergency.<\/p>\n Renegotiate Your Interest Rate<\/em><\/strong><\/p>\n If you have several years of good consumer history with a credit card company, it may be time to try renegotiating your interest rate \u2014 most of the time, they aren\u2019t set in stone.<\/p>\n Call up your credit card company, and be prepared to discuss your virtues as a customer \u2014 your years of being a loyal customer, the fact that you\u2019ve never made a late payment, etc. If you can bring a competing offer from a rival credit card company to the table, you may sway them to cut your interest rate.<\/p>\n If they won\u2019t play ball, another option can be to open a card with a better rate and transfer your balance to that card (provided you can get a good rate at another company).<\/p>\n Conclusion<\/em><\/strong><\/p>\n Used responsibly, credit cards are an excellent tool to build your credit and power as a consumer. With these best practices, you can make the most of your credit card\u2019s advantages, while minimizing the risk.<\/p>\n","protected":false},"excerpt":{"rendered":" Credit cards are a great resource when building your credit. Sure, they let you finance purchases and pay them off later, but they provide a much more valuable service \u2014 they allow you to build your credit file and establish a reputation as a responsible credit holder, which in turn can help you to qualify […]<\/p>\n","protected":false},"author":14,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[158],"tags":[],"yoast_head":"\n