Credit Card Management
Understand Credit Before You Use It
A credit card can be a useful financial tool, but it isn't extra money.
Every time you use a credit card, you're borrowing money that you'll need to repay. Understanding how credit cards work—and how interest, fees, and payments affect what you owe—can help you use credit responsibly and avoid taking on debt you can't afford.
Know How a Credit Card Works
When you're approved for a credit card, you're given a credit limit, or the maximum amount you're allowed to borrow on the account.
As you make purchases, your balance increases. When you make payments, your balance decreases.
Each month, you'll receive a statement showing information such as:
- Your current balance
- Purchases and other transactions
- Minimum payment due
- Payment due date
- Interest and fees charged
- Available credit
Don't wait until the payment is due to look at your account. Review your transactions regularly so you always know how much you've charged.
Understand Interest
What You Buy May Cost More Than the Purchase Price
Credit cards typically charge interest when you carry a balance from one billing cycle to another.
Your card's Annual Percentage Rate (APR) describes the interest rate associated with borrowing on the account.
The higher the interest rate and the longer you carry a balance, the more your purchases can ultimately cost.
Before opening a credit card, understand:
- The APR
- Whether different APRs apply to different types of transactions
- Annual or other fees
- Late-payment fees
- How and when interest is charged
Read the terms of the account rather than choosing a card based only on rewards, introductory offers, or advertising.
Don't Confuse the Minimum Payment With What You Can Afford
Your credit card statement will show a minimum payment.
That's the minimum amount you must pay to keep the account current. It isn't necessarily a good repayment plan.
If you carry a balance and make only minimum payments, it can take significantly longer to repay what you owe and increase the amount you pay in interest.
Whenever possible, pay your statement balance in full by the due date.
If you can't pay the entire balance, pay as much as you reasonably can and avoid adding new charges while you're working to reduce the debt.
Charge With a Repayment Plan
Ask Yourself Before You Buy
Before using a credit card, consider:
Would I buy this if I had to pay cash today?
Do I know how I'll repay it?
Can I pay the bill without taking money away from necessities or other financial obligations?
A credit card can make it easy to separate the decision to buy something from the reality of paying for it.
Keep the two connected.
Protect Your Credit
How you manage a credit card can become part of your credit history.
Build responsible habits:
- Pay your bill on time.
- Keep balances manageable.
- Avoid regularly charging close to your credit limit.
- Don't open accounts you don't need.
- Review your statements for unfamiliar transactions.
- Keep your contact information current so you receive important account notices.
- Understand the terms before making balance transfers, cash advances, or other transactions.
Responsible credit use over time can help you establish a stronger credit history.
Be Careful With Rewards and Special Offers
Cash back, travel points, store discounts, and other rewards can sound appealing.
But rewards only provide value if you're managing the account responsibly.
Don't spend more simply to earn rewards, and don't choose a card based on rewards without also comparing:
- Interest rates
- Fees
- Account terms
- Eligibility requirements
- How the rewards program works
A discount isn't a savings if it leads you to spend money you weren't planning to spend.
Store Credit Cards Are Still Credit Cards
You may be offered a credit card when shopping online or at a store—sometimes in exchange for an immediate discount.
Before saying yes, understand what you're applying for.
A store card is still a credit account. Review its interest rate, fees, terms, and how you plan to use and repay it before applying.
Protect Your Account
Treat your credit card and account information like cash.
- Use strong, unique passwords for online accounts.
- Turn on additional account security when available.
- Never share verification codes.
- Review transactions regularly.
- Be cautious about entering card information on unfamiliar websites.
- Don't provide account information in response to unexpected calls, emails, or text messages.
- Report a lost or stolen card promptly.
If you see a transaction you don't recognize, contact the card issuer using the contact information from your card, statement, or official account—not information provided in a suspicious message.
If Credit Card Debt Is Becoming Difficult to Manage
Don't ignore the problem.
Stop adding unnecessary charges and look closely at:
- What you owe
- Interest rates
- Minimum payments
- Due dates
- Your monthly budget
- How much you can realistically put toward repayment
If you're having trouble making payments, contact the credit card company directly to ask what options may be available.
Be cautious about companies promising a quick or guaranteed solution to debt problems.
Use Credit as a Tool
A credit card can provide convenience, help you establish credit history, and offer protections for certain purchases.
But the goal isn't to have access to the most credit possible.
The goal is to use credit intentionally, understand what it costs, and borrow only what you can responsibly manage.
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