4 Credit Card Rules You Should Always Follow

by Maurie Backman | Published on Aug. 21, 2021

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A female clerk at a clothing store swiping a credit card on a payment tablet.

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Be a smarter credit card user by sticking to these guidelines.

Many of us use credit cards regularly -- sometimes multiple times a day. But even if you've been a credit card holder for years, it's important that you manage those cards wisely. Here are a few essential rules to follow.

1. Never charge more than what you can afford to pay off in full

Credit cards are flexible in that they don't require you to pay your bill in full every month. Rather, you can make your minimum monthly payment, which is a portion of your total bill, and pay the remainder off over time. But any time you carry a credit card balance forward, you automatically end up paying interest on it -- interest that makes your purchases cost extra.

A better bet is to keep your balance low enough that you can pay it off in full by the time your bill comes due. Doing so will also help keep your credit score in good shape, as too high a credit card balance can drag your score down.

2. Don't apply for too many cards at once

There's nothing wrong with having more than one credit card. But one thing you shouldn't do is apply for too many at the same time.

For one thing, doing so could lower your credit score and serve as a red flag the next time you try to borrow money. But also, when you open multiple cards at once, your spending power increases, and that level of temptation could be dangerous.

3. Don't spend more to get rewarded

Many credit cards come with sign-up bonuses that reward you for making purchases. You might, for example, see an offer that gives you $200 cash back for spending $500 within three months of opening a given card.

Sign-up bonuses are a great way to score extra money or reward points. But one thing you shouldn't do is spend extra just to snag them.

Say you normally spend about $800 a month on your credit cards and you decide to sign up for a new card that'll give you $500 cash back for spending $3,000 within your first three months. If you have to force yourself to spend $600 extra during that time to snag your bonus, you won't be up $500 -- you'll be down $100.

4. Make sure your rewards program matches your lifestyle

Some credit cards offer generous rewards on gas fill-ups. Others give extra cash back for restaurant purchases. Those perks are great and all, but only if you spend a significant amount of money on those expenses. If you don't, they're pretty useless.

Before you sign up for a credit card, make sure the rewards program it offers is something you can actually take advantage of. If you hardly dine out but spend a lot of money at the grocery store, you can look for a grocery credit card that offers generous cash back on supermarket purchases.

Credit cards are a very useful tool -- as long as you manage yours the right way. Stick to this set of rules so that you can make the most of your cards and avoid some of the mistakes so many consumers fall victim to.

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