Getting a credit card is a great way to build credit and learn positive money management skills. But when used incorrectly, it can cause a lot more harm than good. If you just got a credit card or want to improve your skills when it comes to using one, check out our top tips for how to use a credit card wisely!

Don’t over-spend

The number one money management tip is to set a budget and stick to it. The same applies to using a credit card. If it’s not in your budget, don’t charge it to your credit card. Emergencies can come up where you have to unexpectedly put something on your card, but this shouldn’t be a common practice.

A good way to use your credit card is to only use it for the things you normally buy anyway, like groceries or your electric bill. This way, you’re building credit, but not taking on any additional debt.

Keep track of your balance

It can be easy to lose track of your balance when you’re swiping your card. Make sure you check your account periodically to ensure you’re sticking to your budget!

Pay your credit card bills on time

When you get your card, make a note of what day your payment is due each month. Missing a payment dings your credit, and you’ll be charged high interest or late payment fees. To avoid this, set a reminder each month or set up autopay to make sure you never miss a payment.

Pay in full whenever possible

It may not always be possible to pay off your full balance each month (like we said, emergencies and unexpected expenses happen). If you do find yourself in this situation, don’t panic. The important thing to do is to pay on time each month, and to pay at least the minimum payment due.

Don’t max out your available credit

You may think you can charge up to your full available credit, but doing so can actually hurt your credit – even if you pay off the full balance each month. This is because your credit utilization is a factor on your credit report. Many experts recommend not charging more than 30% of your credit limit to avoid having high credit utilization. So, if your available credit is $1,000, it’s wise to avoid spending more than $300 on your card each month.

Check your statements

Keep tabs on your charges by checking your credit card statements at least once a month. Go through your charges and make sure there are no charges that you don’t recognize or amounts that don’t look right. If something doesn’t look right, contact your credit card company for help.

There is a lot of responsibility that comes with having a credit card, but using a credit card wisely doesn’t have to be difficult. As long as you stick to these rules of thumb, you’ll be on your way to building credit and learning smart money habits in no time.