As difficult a challenge as credit card debt can be, it’s encouraging to note that recent delinquency rates have been trending low. In fact, credit card delinquency rates remained below 2% throughout all of 2021. This is good news for consumers, as it indicates that most people are keeping up with their monthly payments. To keep the trend going, it’s important to learn how to use your card wisely. Here are some tips for doing just that.

Don’t overspend.

One of the biggest dangers of using a credit card is that it can be easy to overspend. When you’re using a card, you’re borrowing money, and if you don’t pay off your balance each month, you can end up with a lot of debt.

Pay off your balance each month.

When it comes to your credit card, it’s important to always aim to pay off your balance in full each month. This will help you avoid accruing any interest on your purchases. If you can’t afford to pay off your entire balance, try to at least pay off the minimum amount. This will help keep your credit utilization ratio low, which is another factor that lenders look at when determining your credit score.

Use your card for emergencies.

If you have an emergency fund, you can use your credit card to pay for unexpected expenses. This can be a helpful way to avoid dipping into your savings account. However, you should only use your card for emergencies if you can afford to pay your bill in full when it comes due. If you can’t, you’ll end up with more debt and higher interest payments.

Use your card for everyday purchases.

A rewards credit card can be a great way to save money on your regular expenses. By using your card for everyday purchases, you can earn points or cash back. This can add up over time and help you save money on things you would normally have to pay for.

Avoid using your card for large purchases.

There are a few reasons why waiting to purchase something until you have the cash to pay for it is a good idea. For one, it can help you avoid incurring interest on the purchase. If you finance the purchase, you’ll likely be paying interest on the amount you borrow, which can add up over time. It can also help you stay within your budget.

Stay organized.

It’s important to stay organized when you’re using a credit card. This means tracking your spending and making sure you’re aware of your current balance and due date. You can use a budgeting tool or app to help you stay organized.

Be aware of your credit limit.

Did you know that your credit limit is an important factor in your credit score? It’s one of the things that lenders look at when considering your creditworthiness. So it’s important to be aware of your credit limit and not exceed it. If you go over your limit, you can end up with a penalty fee.

Keep a good credit score.

A good credit score can help you get approved for a loan or a credit card, and it can also help you get a lower interest rate. You can improve your credit score by paying your bills on time and by keeping your credit utilization ratio low.

Be aware of credit card scams.

Credit card scams come in all shapes and sizes, and can be very costly to the victim. So, it’s important to be aware of what to watch out for, and be careful when giving out your personal information. If you think you’ve been a victim of credit card fraud, report it to your credit card company as soon as possible.

Use a credit card calculator.

If you’re not sure how much you can afford to spend, you can use a credit card calculator to help you figure out your monthly budget. This can be a helpful tool when you’re trying to stay within your budget.