3 Ways to Build your Credit with your Credit Card Without getting into Debt
Credit cards often get a bad rep ‐ and for good reason if you consider that Americans racked up $870 billion in credit card debt in 2018 alone, according to the Federal Reserve. But credit cards have positive attributes as well, including building your credit history, which can boost your credit score (and earn you rewards!).
But how can you avoid the pitfalls and reap the rewards of owning a credit card? Below are some tips for using your credit cards wisely without dragging yourself into debt.
Put one Purchase on Your Card per Month
Rather than buying the most fashionable fall jacket or heading to the latest restaurant, act as though you do not have the card ‐ at least in the beginning. But don't let it gather dust in a drawer either. Instead, set your card up to pay a monthly bill. Put just one purchase on it that will be the same amount each month ‐ one that isn't overwhelming to your budget. Pay it off each month and you are building your credit.
Don't Add your Card Number to Online Accounts
Credit cards enable you to make online purchases more freely. And although shopping from the comfort of your own home is appealing, it is not wise to keep your credit card information saved on shopping sites or apps as this only makes it more convenient and easy for you to overspend. The lack of convenience of impulse buying late at night may keep you from making purchases you will later regret.
Don't Carry Your Card
Leave your card at home. It is okay to leave it in a drawer so you don't spend it (so long as you don't forget about it)! Taking it with you in your wallet wherever you go may only lead you to temptation to spend more than you have available. When you have your credit card with you, you are more likely to splurge and spend the "extra money" you have available to you that you can simply pay back later. This is deceiving and will only get you deeper into financial trouble.
For help on improving your credit, contact us today.