Credit cards can be a powerful financial tool when used responsibly. They offer a convenient way to make purchases, build credit history, and earn rewards. However, they can also lead to significant debt problems if not used carefully. Here are some credit card essentials to help you use your cards wisely:

Understand your credit limit: Your credit limit is the maximum amount you can borrow on your credit card. It’s important to stay within your credit limit to avoid paying high-interest fees. In fact, creditors want you to use no more than 30% of your available credit. This is known as credit utilization. Doing this helps you raise your credit score, which helps you get better terms (e.g., lower interest rates) for future borrowing.  

Make timely payments: Pay your credit card bill on time every month to avoid late fees and damage to your credit score. Aim to pay off your balance in full to avoid accruing interest charges whenever possible.

Pay more than the minimum payment: If you can’t pay off your balance in full each month, be sure to make more than the minimum payment. Double it, if possible.  This will help you pay off your debt faster and save you money on interest.

Beware of fees: Credit cards often have fees associated with them, such as annual fees, late fees, and foreign transaction fees. Read your credit card agreement carefully to understand all the fees involved before applying for it.

Utilize rewards programs: Many credit cards offer rewards programs, such as cash back, points, or travel miles. Choose a card that offers rewards that align with your spending habits. Some people focus more on the rewards over their responsible usage of their cards. Be careful to not get too preoccupied with the rewards over your reasonable usage of your card.

Secure your card: Protect your credit card from theft or fraud by keeping your PIN and CVV number confidential. Shred old paper statements and keep your card in a secure place when not in use.

Monitor your credit report: Regularly review your credit report for any errors or fraudulent activity. Dispute any inaccuracies promptly. Remember, the only government authorized website is You can now check your credit reports weekly for free.

Budget your spending: Create a realistic budget to track your income and expenses. Use your credit card only for purchases you can afford to pay off in full each month. You don’t want to treat credit like it is an added source of income. 

Avoid overspending: Don’t use your credit card to finance wants instead of needs. Stick to your budget and avoid impulse purchases that you cannot afford. Walk or look away from the item you want for at least 15 minutes and think about longer term, bigger financial goals you may have like a vacation, car or a house.

Consider a secured credit card: If you have a limited credit history or poor credit, consider a secured credit card. You’ll deposit a security deposit, which acts as your credit limit. Use the card responsibly to build your credit score.

Seek financial advice: If you have questions about credit cards or managing your finances, consult a credit counseling agency like Parachute for personalized guidance.

Remember, credit cards are a tool, not a source of income. Use them responsibly to maintain your financial well-being over time and to gain long term financial stability and avoid debt traps.

If you’re dealing with high interest debt payments as well, see what you can save with Parachute’s Debt Management Plan

Would you like to meet one-on-one with one of our Financial Counselors to talk specifically about your budget? Check out our Financial Coaching Session  or call 716-712-2060.