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7 practices of savvy credit card users


Paying with plastic can help you earn rewards, but it can also lead to unwanted debt. Here's how to get the right balance.

Savvy credit card users know how to make the most of their credit card spending without getting mired in debt. If you find yourself bewildered by things like points and rewards, or have ever wondered if you are missing out on some benefits to using your credit card, check out these tips.

1. Use cards with rewards that fit your life

Rewards are only helpful if they match your lifestyle. If you are the type of person that likes to travel and go on vacation, then a Travel Rewards card could be right for you. If you don't travel often, then a card that allows you to earn cash back on all your purchases could be a better fit and help you save a little cash. Assess your needs and find the right credit card.

2. Keep rewards in perspective

It's a good idea to view rewards as a nice perk, not as a game to play with credit. If you aren't sure that you can pay off the balance every month, consider a credit card with a lower APR instead of rewards.

3. Use your credit card to keep track of expenses

Instead of charging and forgetting about it, keep track of your credit card spending to help stay on budget. With mobile banking, you can access your account from your phone anywhere, at any time.

4. Maintain a high credit score

Avoiding late payments will help keep the blemishes on your credit report to a minimum. That will help keep your credit score high. The higher the credit score, the lower the cost of borrowing. This will keep the interest rates on your cards low, minimizing fees and interest charges.

5. Make use of security features

Monitor statements for any suspicious purchases and keep personal information current—both are ways to help protect yourself from fraud.

6. Limit how many times you apply for new credit

Applying for new credit too often can hurt your credit score. For example, that discount you could get when you apply for a new store credit card can be enticing, but if you apply too often, those inquiries on your credit report could end up hurting your credit score.

7. See credit cards as part of your overall financial picture and act accordingly

Using credit responsibly can have a positive effect on your overall financial health. Consistently paying bills on time can help build a stronger credit history and boost credit scores. That, in turn, may qualify you for lower interest rates when it comes to applying for mortgages, car loans and other big purchases down the road.