Are you thinking about opening a new credit card? There are a lot of options out there these days. This makes it even more important that you select the best card for you. There can be many benefits to credit cards, but there are also things you want to be cautious about. Keep reading to find out how to safely make the most of credit cards.
Do your research
Whether you’re looking to open a new credit card or if you’re just starting out, one of the most important things you can do is research. Different companies offer different options with different pros and cons1, and some may not work for you. Be sure to review terms and policies, see what their annual percentage rate is or if there isn’t one, credit limits, perks and other important information. It’s a good idea to take the time to make sure you select a card what most benefits you and your lifestyle.
Only apply for what you need
Sometimes it’s possible to have too much of something. This can be true about credit cards. To avoid falling into a situation where you can’t pay off your credit card bills each month, only apply for accounts you know you can manage and need. It will be better for you and your financial health to not have too many. Plus, having a bunch of inquires on your credit report can negatively affect your credit score.2
Sign up for alerts
Whether it’s emails, text messages or push notifications, it’s important to stay in the loop with your credit accounts. Sign up to receive communications3 from your credit card issuer. You can get notified when you’re close to your limit, payment reminders, fraud alerts and more. This way, you can make sure to pay your statement on time and will be aware if something suspicious happens with your account.
Download the company’s app
Having easy access to your account is a wonderful convenience. If your credit card issuer has an app for your smartphone, be sure to download it. You’ll be able to view your balance, make payments, set spending limits and more. Being able to easily manage your credit card can help you remember to make on-time payments and to be more comfortable with credit. Also, you should regularly check to see how much of your available credit you have used. It can help with creating a budget and to stay on track for responsible spending.
Utilize rewards programs
An awesome benefit of credit cards these days is that many offer rewards programs.4 Most offer 1% cash back on all purchases, but you can sometimes earn 5% cash back at certain places. For example, during one quarter of the year you could earn 5% back at grocery stores or gas stations. This cash typically translates to points, which you can redeem for gift cards, a deposit into your checking account, a payment towards your credit card statement and more. Some credit card companies have partnerships with travel companies and other companies like Amazon®, where you can use your points. Essentially, you’re getting rewarded for the shopping you would do anyway!
The views expressed by the articles and sites linked in this post do not necessarily reflect the opinions and policies of Cash Central or Community Choice Financial® .
1Kiernan, John. (2022, Jul 8). Retrieved from: https://wallethub.com/edu/cc/pros-and-cons-of-credit-cards/25830
2Gonzalez-Ribeiro, Ana. (2022, Feb 25). Retrieved from: https://www.self.inc/blog/how-many-hard-inquiries-is-too-many
3Tsosie, Claire. (2023, Mar 31). Retrieved from: https://www.nerdwallet.com/article/credit-cards/3-credit-card-alerts-to-set-up-right-now
4D’Angelo, Matthew. (2023, Jan 3). Retrieved from: https://www.investopedia.com/what-is-a-rewards-credit-card-5071957