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3 Smart Ways to Use Your Credit Card

If used wisely, credit cards can be a great financial tool. They offer a convenient and secure way to pay for everyday purchases, plus they may help you build your credit score and keep better track of your spending. As an added bonus, some cards even offer cash back rewards, helping you save while you spend.

Wondering how you can use a credit card to your advantage? Read on to learn about three ways to borrow smarter with a credit card:

#1: Build good credit

Having a solid credit score will make it easier to get a loan and may help you qualify for better interest rates. But in order to build good credit, you need to use your credit cards responsibly. Here are some general guidelines to follow:

  • ​Budget before you borrow.
  • Only charge what you know you can repay.
  • Pay your credit card bill on time and in full each month.
  • Avoid using more than a 30 percent on your card from month to month. For example if your available credit is $1,000, you will want to keep your balance at no more than $300.

Use your credit card to establish a pattern of responsible borrowing, and you'll be well on your way to building a healthy credit score.

#2: Easily track your everyday spending

Putting the majority of your daily purchases on one credit card is one strategy to simplify your finances. With all your spending activity in one place, it's a lot easier to track your expenses and stick to your budget. Most credit cards will even categorize your spending in your account online. This way, you can see exactly how much money is going towards things like food, gas and clothing.

#3: Get rewarded for purchases

If you use your credit card for daily spending and pay your bill on time each month, a rewards credit card could be right for you. These cards pay you back a certain percentage on your purchases, helping you save as you spend! You can use the cash back you earn to pay down your balance or put it toward purchases. Look for a rewards credit card that offers a high cash back rate without an annual fee.

Final thoughts

When used with care, your credit card can provide many benefits. The key is to only charge what you can comfortably afford, pay your bill on time each month and keep your credit spending low.

Want more tips and tools for smart money management? Visit Wright-Patt Credit Union's online Education Center to find short, interactive learning modules, helpful videos and upcoming educational events.