Using a credit card responsibly can help you in building your credit history. Most credit cards provide you with a better opportunity of earning rewards and offer better protection from fraudsters compared to debit cards.
Building a good credit involves utilizing your credit card responsibly and consistently improving your purchasing habits. Below are five tips on how you can use your credit card responsibly.

1. Monitoring Your Monthly Statements Regularly

You can’t use your credit card responsibly if you don’t monitor your statements regularly. The bank sends your credit card statement monthly to your email address, and it contains detailed information on all the transactions and charges of your credit card during a specific billing cycle.

It’s essential to monitor your statements monthly to have a better understanding of your credit card balance, the minimum amount of payment required, the credit limit, online and in-store purchases and the due date for all your payments. Checking your card statement monthly will also help you in detecting any suspicious activity that might pose a significant threat to your account.

2. Making Timely Monthly Payments

Your overall credit score is determined by your ability to make payments on time. If you increase your credit card usage, it might lead to a higher credit balance, meaning that you’ll need to make more monthly payments. Missing any payment will negatively affect your credit score.

Always make payments consistently because late payments are always documented on your credit report; they stay there for a period of seven years. If you miss any payments, you’ll also be charged late fees, and this means that you’ll eventually have to pay more in interests and fees.

3. Use Your Credit Card When Planning Your Budget

Apart from tracking spending, the credit card is a good budgeting tool that can help you budget and track all transactions that you make. A credit card statement allows you to know how much money you spend on medical services, merchandise, gasoline, travel and restaurants.

You need to have a spending limit that will help you in budgeting, and that’s why you need to have one that is lower than the line of credit that you can access. Responsibly using your credit card involves maintaining a 30% credit utilization ratio, and you can also keep it lower than 30%.

When you use your credit card as a budgeting tool, you become more comfortable using your credit card and this makes it easier for you to make your monthly payments. When you budget your credit card use, tracking your finances becomes easier.

4. Paying More Than the Required Minimum

Using your credit card responsibly involves making more monthly payments than the required minimum amount. Maintaining healthy finances involves making minimum payments on time, but it’s also essential to keep in mind that your credit card company will charge you interest on every credit balance that is moved to the succeeding billing cycle.

When you pay more than the required minimum amount, it means that you have a lower balance. Having a lesser balance means that you will be charged lower interest by your credit card company.

5. Monitor Purchases

It’s easy to make unnecessary purchases when you get your credit card for the first time. You might find yourself purchasing tickets for a game, buying new shoes and clothes all in the same month without tracking your credit card usage. It’s vital to monitor your purchases to avoid the trap of having a higher credit card bill that you can’t comfortably afford.

When using your credit card to make purchases, it’s essential to always keep your future in mind. You never know when you might require emergency financial assistance. Always keep your future in mind and keep your purchases below your credit limit.