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9 Tips for Using Credit Cards Responsibly

Credit cards are a powerful financial tool. If you use them wisely, they will help you achieve your financial goals. But as the saying goes, with great power comes great responsibility. Abuse them and you will find yourself in a world of financial hurt.

Here are nine tips to help you use credit in a smart, financially-sound way:

1. Read the fine print
Eye-catching promotional headlines can be very appealing. But look at the card agreement details and disclosures. This is where you’ll become familiar with the card’s due dates, fees, interest rates, and other information. You’ll especially want to watch for things like high annual or late fees, or additional costs attached to using the card.

2. Shop around
Credit card companies are very competitive. That means you’ll probably have a few offers from which to choose. Make sure you compare cards rather than just applying for the first one you see. Pro tip: choose one with a lower Annual Percentage Rate (APR).

3. Pay the balance in full every month
Used properly, credit cards provide financial leverage you might not otherwise enjoy. If you pay off your balance in full each month, your credit card account acts as a short-term, interest-free loan. This can help relieve cash flow problems.

When you receive your monthly credit card bill, you’ll see your statement balance along with a minimum amount due. Make sure you pay off your purchases at the end of every billing cycle. This way, you’ll avoid paying interest, which, if allowed to build, can dramatically increase the total cost of your debt.

Pro tip: Set up a monthly email alert or reminder on your smartphone to pay your credit card bill.

4. Use it to build your credit
Remember when we said credit cards are a powerful tool? When you pay off your balances every month, you establish a positive credit history. You demonstrate to credit agencies that you can handle the responsibility of credit. This will become important when you want to buy a car, rent an apartment or apply for a job.

5. Treat it like cash
If you don’t have the money now (or in the near future) to pay off the purchase, don’t put it on your card. You increase your risk of accruing interest and expanding what you owe (that’s how people get into debt).

6. Consider becoming an Authorized User first
Not comfortable with having your own card yet? If there’s someone you trust (for example, a parent or relative) ask if they will let you become an Authorized User on their card. Being an authorized user means you can use someone else’s credit card in your name. You’ll be able to make purchases without being the primary cardholder.

7. Look for a good rewards program (but not at the expense of a high rate)
Choose the right rewards credit card for the way you spend and the type of rewards you’re looking for—whether it’s cash back or points. Make sure to maximize what you can redeem and use. Don’t make purchases you wouldn’t normally make just for the points.

This card has both a cash back option and earns reward points. It could be the one for you.

8. Don’t share it with anyone
Credit cards are private. Don’t let anyone use your card, under any circumstances, even if it’s a good friend who needs to borrow money.

9. Always check your statements
Unfortunately, credit card fraud is a very real thing. To protect your credit, check your statements every month for any charges you don’t recognize. If you see a purchase that you didn’t make, report it to the credit card company right away—it might be a sign of fraud. Understand your credit card provider’s security policy and the card’s security features.

Resources:,, Cambridge Capital Management, LLC,

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