Habits of a responsible credit card user

Like any good habit, using credit cards responsibly gets easier with practice. Apply these guidelines consistently: save, manage, protect. They’ll help you build sound personal finances.

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Guideline 1: Save

  • Look for a card with a low interest rate. This is good advice even if you pay off your balance every month. You never know when something will happen and you’ll have to carry a balance for a couple of months.

  • Beware the “penalty interest rate." Some credit card companies will increase your interest rate if you miss a payment or are late making a payment. Sometimes these increases can be dramatic – and painful. Look for a card that does not charge a penalty interest rate.

  • Don’t pay a fee to transfer your balance. Some credit card companies will charge you a fee to transfer your balance onto their card from another card. You can avoid that. If you want to transfer your balances from high-interest cards to one with a lower interest rate, look for a card that has no balance transfer fee.

Guideline 2: Manage credit

  • Pay on time. Paying your monthly statement on time is one of the best ways to build a strong credit score. It shows you can handle credit and are probably a low risk for defaulting.

  • Consider your balance options: 1) Pay down the balance — Sometimes you can’t avoid carrying a balance, sometimes you can. For example, you can delay additional purchases until you can afford to pay for them without a card. This avoids adding to your existing balance while you pay it down. 2) Carry the balance – If you carry a credit card balance, make paying it a priority and don’t forget to weigh options. As with any loan, you’ll pay interest on the amount you have borrowed every month that you carry a balance. Refinancing may be a good choice.

  • Don’t use more than 30 percent of your credit. One of the factors that makes up your credit score is your credit utilization ratio (the amount of credit you are using compared to the amount of credit available to you). The less you use of the amount of credit available to you, the better.

  • Don’t open multiple cards too quickly. Each time you apply for a credit card, the company “pulls” your credit score to check your eligibility. Having too many of these in a short period of time can weaken your score. Most people only need one or two cards. Look for cards with competitive interest rates, no balance transfer fee and no penalty interest rate.

  • Don’t close old accounts. It sounds like a good idea, but closing old accounts can actually hurt your score by increasing your credit utilization rate. There is a way to minimize the damage to your score if you want to close an account, but be thoughtful about which accounts you close.

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Guideline 3: Protect

  • Use your card online and for larger purchases. Credit cards offer consumers protection against fraud and poor quality issues. You don’t have that protection when you pay with cash or by check.

  • Get your card statement electronically. Estatements are good for the environment, and more secure for you. Even in this era of online theft, one of the most common ways to steal your account information is to take your statement right out of your mailbox.

  • Read your card statement every month. The only way you can catch errors or fraudulent charges on your statement is to read your statement. If you find something wrong, report it to your credit card company immediately by calling the number on the back of your card.

  • Manage your card with Card Management and Card Control. Located in online banking or on the mobile app, Card Management and Card Control put you in control of how and where your card is used.

You don’t have to overpay for your credit card

Explore your options with a Visa Value card, offering competitive rates and no fees or a Visa Rewards card, offering 1% cash back on every purchase. Sign up today and begin saving.

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*APR = Annual Percentage Rate. The 12.00% APR is reflective of a range of rates available. When you open your account, the applicable APR will be based on your creditworthiness. After that, your APR will vary with the market, based on the Prime Rate. Rates are current as of May 28, 2024. **Visa Rewards has an annual fee of $0 - $25 depending on your Member Merits category. Foreign transaction fee is up to 1% of the U.S. dollar amount of the foreign transaction. Membership in this credit union is required.

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