5 Skip Those Rewards
Finally, if your card is a rewards card or has other perks, don’t forget to take advantage of them. You may be paying for them in the form of a yearly fee, or at the very least, they are part of the benefit of holding the card. By not using them, you are giving the credit card company a pass. That’s not quite bad as giving it free money in the form of late fees, but it’s still money in its pockets that could go in yours.
4 Mangle the Payment
No matter how much or how little you charge, eventually you’ve got to pay it back. And whatever you do, make sure you pay it back on time; making a late payment can get you hit with a fee as well as damage your credit rating. But even a late payment is better than no payment at all, so make sure you always pay at least the minimum. But if you can, send more than that required payment—otherwise, you’ll be carrying that debt far longer than necessary.
3 Max It Out
No matter how much you spend, or plan to pay back each month, one key is not maxing out that credit card. It’s tempting to take advantage of that brand-new card, but resist temptation as much as possible. Not only will you not be able to charge anything else — in an emergency, say — but you run the risk of going over your credit limit and getting socked with costly fees.
2 Go Crazy Spending
Speaking of huge balances, just because you have a big credit limit doesn’t mean you have to use it. Keep your charges under 10 percent of your limit, the Main Street website suggests, because part of your credit rating is how high a debt-to-limit ratio you’re carrying. And don’t forget to plan how you’re going to pay off those charges. The longer you carry a balance, the more you pay in interest, and suddenly that $50 pair of shoes costs you $200 in cash.
1 Ignore the Fine Print
Before you charge a penny, make sure you’ve read your credit card agreement and understand it. This includes things like knowing that special introductory interest rate the salesperson pitched to you—and, more importantly, knowing what it will rise to, and when. That way, you won’t run up a huge balance on that “0.9 percent” card, only to get socked paying 21.99 percent.