Here's the Best Credit Card Advice We Found on Instagram

Instagram actually got it right on these credit card tips.

With so many influencers on Instagram, it can be hard to know who to trust when it comes to financial advice. And while there's plenty of terrible financial advice floating around online, we've found some real gems on Instagram that can help you save money, improve your credit score, and make smart financial decisions.

Pay off your credit card balance every month

This may seem obvious, but Americans pay roughly $120 billion a year in credit card interest or about $1,000 per year for every American household. Credit cards are one of the largest sources of consumer debt, but it’s important to pay off your balance every month.

This is some of the best credit card advice out there, and it's something that far too many people don't heed. Just because you have a high credit limit doesn't mean you should max it out every month. If you can't afford to pay off your balance in full, then you need to reevaluate your spending habits. Otherwise, you'll find yourself buried in debt before you know it.

Make more than the minimum payment

If you get yourself into a bind and can’t pay it off every month, try to pay more than the minimum. @modernmoneyinc in a post breaks down how credit cards work and "how the high interest rate associated with most cards can pile up if you have an outstanding balance." The post gives an example of Mark splurging on a trip to Europe and spending $5,000 on his credit card. If Mark can only pay $1,000 on the due date and $500 a month, then he will pay a total of $330 in interest assuming a 19.99% interest rate. 

However, if Mark only pays $100 a month, then it would take him 67 months (over 5 1/2 years) to fully pay off the debt and he would be paying $2,647 in interest. That is one expensive trip to Europe. The credit card companies want you to pay only the minimum. That is how they make money. @modernmoneyinc states that "credit card debt is often the worst type of debt that a young professional can carry!"

How to use credit cards in a positive way

If used properly, credit cards can offer some significant benefits. In a post, @thriftlondoner says credit cards offer three benefits: travel protection, rewards, and sign-up bonuses. Many credit cards offer purchase protections or travel coverage. They offer fraud protection as well as liability coverage. This means if someone uses your credit card fraudulently, you are not liable for the purchases you didn’t make.

Many credit cards offer rewards like cash back or points that can be redeemed for travel. Do your research to find the credit card that best fits your lifestyle. Some offer extra rewards for dining and restaurants, groceries, gas, and travel. If you don’t have a credit card offering rewards, offers, or cash back, then you are leaving money at the table.

Last, some credit cards offer great sign-up bonuses. "Many cards will offer a welcome bonus upon joining. This could be in the form of cash, points, or vouchers." Many rewards cards offer sign-up bonuses worth hundreds of dollars in cash. While the bonuses can be lucrative, you have to earn them by spending money on the card. It is important to not go further into debt just for the sign-up bonus.

If you're like most people, you probably have a love-hate relationship with credit cards. On one hand, they're incredibly convenient and can help you rack up rewards points you can use for travel or other purchases. On the other hand, it's all too easy to get into debt with credit cards if you're not careful. Paying off your credit cards every month can help you enjoy the benefits they offer.