How to Use Credit Cards: 6 Do’s and Don’ts That May Surprise You

One can never learn enough about the credit card industry, so while you’re here I’ll share some surprising do’s and don’ts about credit card usage. Following these tips should keep you out of trouble and hopefully keep that FICO score as stable as San Diego’s temperature.

1. DO look for errors on your credit report. Despite how much I’d like to believe, I’m probably not the only Logan Abbott in the United States. I might pay my bills on time and payoff my credit cards every month, but somewhere out there, there could be an evil Logan, lurking around every corner, carrying a balance and maxing out cards left and right.

Although we’re different people, every once in a while, the evil person with your name could show up on your credit report. So every time you get a credit report, double check it to make sure everything on there is really you.

2. DON’T cancel credit cards without knowing how it will affect your credit score. A lot of times it is better for your score to just keep the card open and use it every few months. This shows creditors that you are able to manage multiple lines of credit and increases the overall age of your credit history.

Ending the life of a credit card prematurely can affect your credit history drastically, so no matter how much you want to snap it in half, just pay it off and tuck it away in a drawer instead.

3. DO pay it off in full every month. I know this isn’t the first time you’ve heard this, you’ve probably heard it a million times before, but if at all possible, do not carry a balance. You’ll end up paying interest on stupid things like pizza and movies, and we all know what happens when you put things off -- they stay off. One month of paying the minimum can turn into two, which turns into three, and so on. Charge what you can afford and pay it off.

4. DON’T apply for a bunch of cards at the same time. This makes you look desperate for credit in the eyes of the lenders, and despite what you might look for in a significant other, this is not an attractive quality for those handing out the money.

5. DO make multiple payments on your card per month. In an ideal world you’d like to keep your your balance at around 10 percent of your credit limit. If you use most of your limit each month, even if you pay it all off, it still might take a toll on your credit score. Avoid this by routinely making “micropayments” two or three times a month, thus showing the bank that you aren’t too credit dependent.

6. DON’T use a rewards card if the value isn’t there. If you’re carrying a balance on a rewards card, you probably aren’t getting much value for your rewards. If you’re shelling out high interest on the balance you’re carrying each month, you probably aren’t seeing any real savings when it comes to your free air miles or cash back.