Woman holding cell phone and credit card with empty notebook in front of her.

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The value you get from credit cards depends quite a bit on how you use them. If you spend responsibly and pay in full, credit card rewards can make you money. Overspending, on the other hand, could put you in debt and cost you.

To ensure you come out ahead, it helps to set goals. Good credit card goals give you targets to aim for and encourage smart financial habits. Here are three simple and effective credit card goals that will keep you on track through 2021.

1. No credit card debt

If there's one way consumers get in trouble with credit cards, it's credit card debt. The average credit card balance in 2020 reached almost $6,000. On a card with an average APR of about 16.5%, you're looking at nearly $1,000 per year in interest.

Considering the cost of interest, paying off credit card debt can be a huge money saver. Here are a few tips that can help:

  • Calculate how much you need to pay per month to get your balances down to $0 by the end of the year.
  • Review your budget and cut back on nonessential expenses so you can make bigger monthly debt payments.
  • Look at balance transfer credit cards with a 0% intro APR. This type of credit card lets you refinance your credit card debt at zero interest for the length of the promotional period.

Even if you don't currently have any credit card debt, you can still set this goal. Instead of paying off debt, focus on paying your credit card bill in full every month to avoid debt.

2. Earn $500 in rewards

Credit card rewards are a fantastic way to get money back on your everyday spending. If you're new to rewards credit cards, the two most popular options are cash back cards and travel cards. Both can work well, so it's just a matter of whether you prefer cash back or points you can redeem for travel.

Now, $500 in rewards may seem like a lofty goal, but there are several ways to hit that mark:

  • Pick up one of the credit cards with the best sign-up bonuses. Some of the biggest bonuses offer $500 or more to new cardholders who meet the spending minimum.
  • Open a credit card that earns 2% back on every purchase. A little under $2,100 in monthly credit card spending would earn $500 back per year.
  • Get a credit card with bonus rewards in areas where you have high spending. For example, you could get a card that earns 4% back on groceries and dining if those are two big expense categories for you. About $1,050 of monthly spending in those areas would get you $500 back.

3. Go up one credit score range

Your credit score is an important part of your financial profile. The higher it is, the more likely you are to get approved for the best credit cards and low-interest loans.

It takes time to boost your credit score. That's why a realistic goal is important. Going up by one credit score range is achievable within a year. Here are the credit score ranges using the FICO® Score system, which is the most widely used:

  • Very poor: 300-579
  • Fair: 580-669
  • Good: 670-739
  • Very good: 740-799
  • Exceptional: 800-850

There are only a couple of things you need to do to improve your credit. Most important is paying all your bills on time. You also shouldn't use too much of your credit. Ideally, your balances should never exceed 20% of your total credit lines. This will keep your credit utilization ratio down.

If your credit score is already very good or exceptional, you likely don't need to improve your credit much, if at all. In that case, your goal can be to maintain your credit.

You don't need a long checklist of credit card goals for the year. With just these three, you'll save money on interest, make money from credit card rewards, and end the year with a better credit score.