*Personal Finance* - How to Properly Use a Credit Card

Credit cards can be tricky any time of the year But they are especially challenging during the winter holiday shopping season or during summer vacations. Before you start racking up hundreds, or even thousands, of dollars on your credit cards, there are some pieces of advice that you should keep in mind. Credit cards are not evil. You just need to know how to use them.

Find the Right Card

When you apply for credit cards, you need to find cards that fit your lifestyle. If you travel extensively, then a credit card with a good travel miles program and discounts on hotels and rental cars is an ideal choice. If it comes down to a choice between a card that has a great rewards catalog where you can spend rewards points or a card that will get you a free plane ticket every six months, then the choice is easy.

But not everyone is influenced by traveling. If you are all about the Benjamins, then find a card with a high cash-back percentage. The most common percentage for cash-back programs is two percent. But there are higher percentages out there and you should take the time to compare offers to find the best ones.

Some credit cards come with a rewards program that allows you to accumulate points towards the purchase of products from a catalog. If you do a lot of gift-giving, then this is an ideal rewards program to get involved in.

You can find cards with combinations of rewards programs attached to them that can fit your lifestyle. When it comes to using a credit card properly, it all starts with making sure that you find the right card for you.

How Much to Spend

People get obsessed with paying off their credit cards after the holidays or when they get back from a vacation. In reality, if you want to build your credit score, then paying off your credit card is the worst thing you can do. On the other hand, maxing out the balance on every card you have is also a bad idea. You need to find that happy medium.

A good number to use is 30 percent of your available credit. If you can maintain your credit card balances at 30 percent, then you are doing a lot to improve your credit rating and you are also keeping your monthly minimum payments low.

If you want to eliminate a monthly minimum payment by paying a credit card off, then you have to do what you have to do. But do not cancel the credit card. Having old credit accounts with low balances and decent payment histories will do wonders for your credit rating.

When To Use Your Card


A credit card should be saved for an emergency situation only. If your transmission goes, then you can use your credit card to get it fixed. But, as we just discussed, using your credit card is a good thing in the right situations.

In your monthly budget (you do have a monthly budget you follow, don't you?) you have a certain allowance for groceries and gas for the car. So long as you have the cash available to pay those purchases off within 30 days, then using your card to buy food and gas is a good thing.

When you use your card for those monthly purchases, you add more points to your rewards programs and you get more cash back. Just be sure you pay that balance down within 30 days because you do not want to be financing all of your groceries and gas each month.


Credit cards are great ways to improve your credit rating and help finance those emergency purchases people inevitably experience. If you have a plan for your credit card spending, then you can avoid going into debt. Just remember, there are always people like me available to help you get out of debt. But that is going to cost you!