Credit cards are a paradox, if you do not know how to use them responsibly. But if you’re strategic about credit cards, they can help you establish and improve your credit score, earn rewards, manage your finances and more. New users of credit cards are unaware of its usage and costs and end up getting trapped in the credit card debt. Credit cards are dangerous as it might end you up purchasing more things than you can actually afford. Using your credit card wisely can protect you from such situations. So following are some tips for using a credit card.

1. Set a Practical credit limit:

Your credit limit should be an amount you know you can repay, and one that won’t tempt you to spend more than you can afford. Credit card providers may offer you a high credit limit but it is you who has to set the limit. If you are a beginner to credit cards then you should keep your credit card limit low. It helps you to understand credit cards in a proper way. After that you can take a higher credit limit.

2. Keep a track of your spending:

It is very easy that you spend over your limits. So you should keep a check on your spending. Banks give you a credit limit but you should also keep a personal limit on how much you will use from your credit card. You should aim to exhaust less than 30% of your credit limit.

3. Always pay your bills in full:

Always remember to pay your credit card bills in full. Never pay only the minimum amount, you should pay the entire credit card bills. If you do not pay the bills on time then you would not only have to pay the bills but also the interest charged on the due amount. It will also have a bad impact on your credit score.

4.  Set up an auto-pay to avoid late fees:

Automatic payments ensure that you don’t miss a payment and have to pay a fee. And even one or two late payments can significantly drop your credit score. So it’s better that you pay your credit cards bills on time.

5.  Do not buy multiple credit cards:

If you are new to credit cards then you should not get into buying multiple credit cards. Even handling one credit card might prove to be difficult to handle.

6.  Avoid Cash Advance Facility:

Unless it’s an extreme emergency, avoid using the Cash Advance facility on your card. The interest rate on Cash Advance is the highest. There is no grace period available for cash advance. So in case you withdraw cash from your credit card then the interest will be charged from the very first day and it will continue till the amount is paid in full.

7.   Pick a card with rewards:

Some credit cards come with some fabulous rewards. Whether its airline miles, cash back, or grocery discounts, make sure that your card’s perks suit your needs, and don’t forget to cash in on those rewards.