Smart Ways To Manage Your Credit Card

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Last updated on August 23rd, 2023

Credit cards are a popular payment method, but what may not be common knowledge is how to use them wisely. Consider a few smart ways to manage your credit card to improve your personal finances.

Ways To Manage Your Credit Card Wisely

Managing a credit card is a big financial responsibility. The most seasoned credit card holders know there are intelligent ways to make credit cards a handy financial tool. Managing your credit cards is necessary because they tie in with your credit score.

A good credit score gives you the upper hand in taking out loans, mortgages, car notes, rent, and more. These are all essentials found in modern living. This further proves the necessity of having a good handle on managing your credit card to ensure a positive credit score.


The first thing you want to keep in mind is budgeting. It’s easier than it sounds. Create a simple budgeting plan for your spending. Start with a calculation of your monthly income after taxes. Next, make a list of your monthly bills, then your savings goals, and finally, your flexible expenses like entertainment, shopping, etc.

Your budget will help simplify how much money you can spend concerning your income, so you’re not blindly spending and tapping your credit card. Stick to your budget so that there is no room for error. And be sure to review your credit card statement to help track your expenses.

Prioritize Paying on Time

Make it a priority to pay your credit card statement on time. Missing a credit card payment can drastically affect your credit score because card issuers report to the credit bureaus. Stay on track with on-time payments to build a positive credit history. Not to mention, missing a credit card will likely result in a late payment penalty fee. Not so convenient when you have a budget that doesn’t include late fees. When you make your payment, try to pay more than the minimum payment so as not to accrue large lump sums of interest. Ideally, paying off your credit card balance every month is best to avoid interest rates.

Build Good Spending Habits

To develop good spending habits, you must assess your monthly spending and adjust as necessary. As mentioned, you don’t want to blindly spend your hard-earned money. Make it a habit to monitor the transactions via your credit card activity. Keeping an intentional eye on your monthly transactions helps keep you aware of your spending habits so you can further improve your spending patterns.

Keep a Low Credit Utilization Ratio

Your credit utilization ratio is the percentage of credit you utilize on your credit card limit. For example, if you have one credit card with a $1,000 credit limit and make a $600 charge, your credit utilization ratio is 60% of the total $1,000 credit limit. If you have multiple credit cards, you can calculate the ratio by dividing your total balance owed on all credit cards by your total credit limit.

The higher your credit utilization ratio, the more negative impact it may have on your credit score. It’s one of the factors used to calculate your credit score because it indicates how well you manage your finances. Experts typically recommend aiming for a 30% or less credit utilization ratio. Maintaining a low ratio over time can benefit your credit score by raising it.

Ways to Keep Credit Utilization Low

  • Requesting a credit limit increase from your card issuer
  • Pay off your credit card balances as you earn money

Use Credit Card Rewards

Lastly, a smart way to manage your credit card is by using its rewards. Use a cash back credit card to earn rewards and redeem them. Cash back credit cards help you earn when you spend. Use your cash back credit card wisely to earn rewards on your everyday purchases. Then redeem your earned rewards for credit card statements and more.

Related Article: How to Get a Super-Prime Credit Score

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About: Jeannyn Gomez
Jeannyn Gomez

Jeannyn is the Content Management Assistant for In addition to serving on all aspects of social media and spreading the word on expert credit and personal finance advice, Jeannyn finds herself on quests for humor, supernatural phenomena, and conspiracy theories for fun.

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