Credit cards are one of the easiest ways to build credit if you know what you’re doing. Did you know that in order to maintain a higher credit score you should only use one third of your maximum spending limit? Here are some ways to stay disciplined and keep your balance low
Make your credit card harder to access.
This might include hiding the physical cards and getting rid of your easiest ways to access the card number. Samsung Pay, Apple Watches and other apps make it ridiculously easy to spend money you don’t actually have because you don’t need the physical card. Do you also have the card information saved on Amazon? I would recommend deleting these sorts of apps and only using the card for emergencies.
Plan ahead for credit card use.
“When you fail to plan, you plan to fail.”
If you’re serious about building your credit, credit cards should not be used for random items or emergencies. To really make ‘flight mile’ or ‘cash back’ card work for you, choose a high or moderately priced bill to pay every month on your credit card. Then use your checking account to pay the bill off right away. This method will show the credit bureau that you are responsible and will likely get you better credit options in the future.
Always pay more than the minimum balance.
If you’re not paying more than the minimum balance then:
When you run your credit card bill up thousands of dollars and the company only asks you to pay 25 to 35 dollars a month, it seems like a great deal. Over time however you are giving away much more money to the credit company than you actually borrowed.
For example if you carry $1100.00 on a credit card that charges you 25.40% interest each. Your amount due may only be $25.00 a month but you are also adding $23.00 to your debt each month. By the end of the year you have given your credit card company $276.00 of your hard earned money.