Credit cards often get a bad rap. They’re evil. They can destroy your family’s finances. They can ruin your credit.
While all these things can happen, they occur most often because of poor financial habits and abuse. Credit card users can show healthy habits too. Consumers can responsibly use credit cards if you want to use debt, build healthy habits, and subsequently use credit for bigger and better things, like a home mortgage.
Creating great habits with your credit cards will, in turn, help you build a healthy credit history and credit score, which in turn allows you to move on to more serious financial goals like owning your own home. Here are seven things that you can do to help you to build healthy habits while using credit cards.
1. Pay Off Your Credit Card Each Month
There are many times when you will need to use a credit card. You should protect yourself by using a credit card instead of a debit card linked to your checking account in many instances like renting a car and staying in a hotel. Many of these businesses place large holds on your credit or bank accounts.
If you use debit cards in these instances, you can often find yourself struggling with a cash flow problem. You could bounce checks if you’re not careful and have a large buffer. These are instances where using a credit card may be worthwhile. But, you will also want to strive to pay off your credit card balance each month.
Paying off your credit card balances each month can help you build a great credit score. It is also a way to develop healthy habits with respect to credit and debt. You might also want to consider only using one credit card. Then, you will only have one card to pay off in full at the end of each month when you receive your statement. You can also build reward points by focusing on one credit card with the best credit reward program.
2. Pay More Than the Minimum Monthly Payments
If you want to have healthy habits with credit cards, you shouldn’t keep a credit card balance every month. But, if you do, then you should pay more than the minimum monthly payments.