Credit cards can be a great tool to help you and your finances – if you know how to use them properly.
Whether you’ve never had a credit card before or just want to take better care of your credit card, here are our six credit card dos and don’ts to help you!
Don’t: Spend too much of your available balance
If you just got a new credit card or a limit increase you may be tempted to spend it all, but beware! You should plan on only spending as much as you can afford to pay off monthly. Spending too much of your available balance can also negatively affect your credit score. Keep your credit utilization ratio — how much you spend versus your total credit line — below 30%.
Do: Take advantage of balance transfers if you’re in debt
If you are trying to pay off debt, balance transfers can be a great tool. Instead of making payments that go mainly towards paying interest, take advantage of a balance transfer that offers a 0% interest rate, like a Platinum Rewards Mastercard with PCU. That way your payments will go toward paying off the debt, not the interest, and will help you get out of debt faster.
Don’t: Close old credit cards
If you have credit cards you don’t use anymore you may want to close them, but this too can negatively affect your credit score. The length of your accounts is considered when calculating your score, so if you close old accounts you will have a shortened credit history. Keep those old cards open, and active, even if it’s just a small monthly payment.
Do: Know your side benefits
It seems every credit card nowadays has plenty of side benefits, from fraud protection, rewards points and even trip insurance. Make sure you do your research before getting a new credit card and choose one that has benefits that will be best for you. If you already have a card, make sure you know what all your benefits are, or you may be missing out on deals and even rewards! Read more about the benefits of shopping with a credit card.
Don’t: make only the minimum payment
As we’ve already mentioned, often when you have credit card debt your monthly payments only go towards paying off the interest. This is especially true if you’re only making minimum payments a month. You should strive to pay off your balance every month but if you can’t, make sure to pay more than the minimum payment.
Do: Redeem your rewards
Once you know what side benefits you have through your credit card, make sure you take advantage of them. As many as 31% of credit card holders aren’t redeeming their rewards! If you have a Platinum Rewards Mastercard through PCU and you’re not using your rewards points you could be missing out on gift cards, travel and more!
With knowledge and proper use, credit cards can help your credit score and you can use it to help pay down debt and even make your credit card work for you with rewards! Looking for a rewards credit card in New City, Nanuet, or Orangeburg, get started with a Platinum Rewards Mastercard from PCU today! Palisades CU offers credit cards and other financial services to eligible members of Rockland and Bergen County.
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