May 17, 2022

Credit cards can be a smart financial tool when used wisely. They’re secure, flexible, and may come with perks like rewards or cash back. Credit cards are especially handy and secure when you shop online, purchase gas, or use for travel expenses like rental cars or hotel rooms.

Credit cards offer peace of mind because the Fair Credit Billing Act protects you against fraudulent charges or credit card accounts that have been falsely opened in your name. It also helps protect you if there are billing errors, duplicate charges or other mistakes.

Here are three tips for using your credit cards wisely:

1. Carefully manage your credit limit

If you have a good payment history, you might earn a higher credit limit. Just because you can charge more, doesn’t mean you should. Credit card debt can create financial problems if your spending spirals. Credit cards are a great way to cover short-term costs or certain emergencies – but avoid using them for impulse buys.

2. Use digital tools to stay on track

Take advantage of digital and mobile tools to manage your credit cards. These tools can help you:

  • Keep track of your charges so you can stay within your budget
  • Check for any fraud or errors
  • Send alerts to confirm your card is being used properly
  • Make sure you pay your bill on time

3. Know your interest rates, transfer fees and benefits

If you have a high credit score, you may be able to find a lower interest rate (called Annual Percentage Rate, or “APR”) on a credit card. It’s a good idea to review your credit score and current interest rates once or twice each year to see if you could do better with a different credit card.

Sometimes credit cards offer 0% interest on balance transfers. This can be a great way to reduce credit card debt but read the fine print. They might charge a fee or interest on the amount of debt you’re transferring or have a big jump in the interest rate after a period of time. Compare any transfer costs with your current rates to see if moving the debt can save you money in the long run.

Are the rewards worth it? It pays to read the fine print. If you have to charge a large sum upfront to earn rewards, it might not be a smart move if you add more debt than the reward is worth. If you earn points, rewards or cash back with purchases as you go, this may be a smart move.

Credit cards are a quick, convenient way to take care of expenses. If you’re unsure about opening a new credit card account, contact your nearest Cinfed branch to schedule a no-cost, no-obligation conversation.