Learn the 5 Credit Card Usage Best Practices

Credit cards, one of several payment alternatives available to you, are a vital financial instrument that, when used carefully, can help you develop or improve your credit over time.

First Phase Credit Card

If you are among the millions of Americans, who will be using their credit card to buy this Christmas season, spend a few minutes reviewing some of the best credit card practices.

1. Charge just what you know you can comfortably afford to pay back with your credit card.

A credit card is an easy way to pay for daily spending. It can also be used to finance a purchase you can pay off over time. You mustn’t overspend or make unnecessary purchases with yours.

You will be charged interest on those purchases if you overspend and cannot pay off your amount. Credit card expenses are primarily the result of carrying huge balances. A decent rule of thumb is only to buy what you can afford in cash.

In some situations, transferring a higher-rate balance to an Arbor Financial credit card and seeing if you qualify for a lower, competitive rate* can help you pay off debt faster. You could pay off your balance more quickly and with less interest.


2. To prevent interest charges, pay off the balance in full each month.

Your credit card payment history is reported to the three major consumer credit bureaus.

Credit card payment history accounts for around 35% of your credit score. Therefore it is critical to make timely and complete payments. Make at least the minimum payment on time if you cannot pay in full. This can help you build a practice of intelligent borrowing and save you money on interest rates.

When done regularly, this can assist improve your credit score. Learn why you should always pay more than the minimum balance on your credit card.

3. Never, ever pay a bill late.

Because your payment history is one of the most powerful aspects of a credit report, you must pay your bills on time. Ongoing, timely payments help to keep your interest rate low and boost your overall credit health. When your bill arrives, you can pay the minimum, the entire amount, or an amount in between. However, as previously said, paying off your balance in full will assist you in avoiding incurring interest charges.