How to Use a Credit Card: Expert Tips to Save You Time and Money

Knowing how to use a credit card efficiently can maximize your card's value.

Person paying with a credit card using a credit card terminal
(Image credit: Getty Images)

Have you ever wondered how to use a credit card to maximize efficiency? Sure, using a credit card can be simple, but with so many rewards credit cards on the market, it’s important to know how to get the most value out of your card. 

Here are some expert tips to save you time and money when using a credit card. 

How to use a credit card

1. Pick a card that works for you

As long as you take the time to choose a credit card wisely, using a credit card can be a smart way to shop. There are several types of credit cards on the market, so It’s important that you find the right one to meet your specific needs. 

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To choose a credit card, it's important to consider why exactly you're opening a card. Are you looking to earn cash back on purchases? Or do you want to transfer existing debt onto a card that enables you to avoid interest? You'll also need to take into consideration your credit score. Having a low credit score means your credit card applications are more likely to be rejected, and you'll likely be stuck with a high APR if you are approved for a card.

Once you’ve picked a card, read through the card agreements and understand the card’s terms and conditions. You’ll need to be aware of any potential due dates, interest rates and fees. The annual percentage rate or APR varies from card to card, so it’s important to keep yours in mind before swiping at the register. 

Below you can use our tool, in partnership with Bankrate, to find the card best suited to your needs.  

2. Take advantage of rewards/benefits

When opening a card, pay attention to any rewards structures or added benefits associated with the card. Choose a credit card that rewards you in the areas you shop the most, or open a flat-rate cash back credit card that earns points on all purchases. This way, you’ll be able to maximize your rewards earnings in the categories in which you’re already spending the most. 

Also, check to see if your card has a credit card sign-up bonus, which typically requires cardholders to spend a minimum amount in a certain time frame in order to earn a large amount of points, miles or cashback. Sign-up bonuses are an easy, quick way to rack up a large amount of points in a short amount of time. 

Additionally, many cards come with further benefits that provide added value to the card, such as free checked baggage, airport lounge access, and purchase or fraud protection. 

3. Always make on-time payments

One of the most important things to know about using a credit card is that making on-time payments is essential. Your credit score is largely determined by payment history, which makes up 35% of your overall credit score. For this reason, missing even one payment will negatively impact your score, and it will take time to rebuild a history of on-time payments. If you fail to make an on-time minimum credit card payment, you’ll also be subject to late fees and will accrue interest on your balance.  

4. Don't just pay the minimum

While making the minimum payment on your credit card each month will allow you to avoid any credit card late fees or negative marks on your payment history, your balance will eventually add up. Over time, this will accrue interest payments that can be expensive — sometimes landing cardholders into a cycle of ever-growing debt. Paying more than the minimum can help you avoid racking up any interest charges. 

5. Stay below your credit limit

Another good rule of thumb when using a credit card is to keep your balance well below your credit limit. This not only makes it easier to pay off any balances on the card, but it also keeps your credit utilization low. By keeping your credit utilization ratio as low as possible, ideally below 30%, you’ll improve your credit score.  

6. Only spend what you can afford

While it may seem obvious, the best practice when using credit cards is to only spend what you can actually afford. Using the spending analysis tool offered on your online account can help you visualize which categories you’re spending the most in, and need to cut back on to stay in budget.  

7. Pick your own payment due date

A great tip when using a credit card is to pick your own payment due date. It can be a simple way to ensure that you’ll always make your payments on time — for example, you can make the due date for all your credit cards right after payday. 

Remember, using a credit card wisely can help you build a good credit score while taking advantage of credit card perks. However, using your card recklessly can land you in a difficult financial position, where your primary worry will be how to pay off credit card debt.

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Erin Bendig
Personal Finance Writer

Erin pairs personal experience with research and is passionate about sharing personal finance advice with others. Previously, she was a freelancer focusing on the credit card side of finance, but has branched out since then to cover other aspects of personal finance. Erin is well-versed in traditional media with reporting, interviewing and research, as well as using graphic design and video and audio storytelling to share with her readers.