A very-serious-but-not-boring guide to responsible credit card use
Let’s face it: credit cards can either be your best friend or worst enemy. Use them responsibly and they can help you build credit, earn rewards and cover emergency expenses. But use them not-so-responsibly and you could find yourself facing interest payments and increased debt. No pressure, right?
But there’s good news. With a little know-how and a few good habits, anyone can master the art of responsible credit card use. Whether you’re just starting out or recovering from past mistakes, these 10 tips can help you get the most out of your credit card.
1 Pay your balance in full each month
Interest can turn even small, innocent purchases into big headaches. By paying your full balance each month, you can avoid interest charges and keep your finances on track.
Tip: If making the full payment isn’t possible this month, focus on making at least the minimum payment. This will help you avoid late fees and dings to your credit score.
2 Set up automatic payments or reminders
Life gets hectic, but missing a payment can cost you more than just a late fee – it can also damage your credit score and lead to higher interest rates in the future. Automatic payments can help make sure your credit card bill gets paid on time every month.
Tip: Prefer a slightly more manual approach? Set reminders on your phone or use Capital One Alerts to know when it’s time to make a payment.
3 Get to know your card
Knowledge is power. Very few people enjoy reading the fine print, but it pays to know your credit card’s terms, interest rate, fees and benefits. You’ll be able to avoid surprises and feel more in control of your finances. Plus, you’ll understand and know how to compare your options when it’s time to get a new card.
4 Track your spending
A little vigilance goes a long way. Monitor your spending regularly (perhaps with the Capital One mobile app?) and stick to your budget. This will help you stay on track, within your credit limit and able to pay off your balance each month. Plus, you’ll have an easier time spotting any mistakes or fraud early. So whether you use a budgeting app or a notebook, find a system that works for you and stick with it.
Tip: Not sure where to start ? Here are 12 monthly expenses to include in your budget.
5 Avoid cash advances
They might seem convenient, but cash advances come with higher interest rates and fees. They also don’t have an interest-free grace period, which means that – unlike with normal purchases – by the time you receive your statement you’ll have already been charged interest.
6 Spend below your limit
Do your best to keep your spending well below your credit limit. Maxing out your credit card can hurt your credit score and may even open you up to additional fees.
7 Keep your credit utilization rate low
Add up all your balances and then add up all your credit limits. Next, divide your total balances by your total credit limit. You’ve just calculated your credit utilization rate. Keeping this number below 30% helps increase your credit score by showing lenders you’re a responsible borrower. For example, if you have a $1,000 limit on one card, and a $10,000 limit on another – aim to keep your balance below $300 on the first and below $3,000 on the second.
8 Check your credit score often
Think of your credit score as your financial report card. Checking it regularly will help you spot errors, track your progress and get a head start on any problems or issues.
Tip: Anyone can check their credit score for free with Credit Keeper™ from Capital One1. Checking won’t impact your score, no matter how often you do it.
9 Act fast if your card is lost or stolen
A missing credit card is one of life’s scarier inconveniences. But don’t panic. As soon as you can, report it to your issuer so they can lock your card and send you a replacement. Next, check your account for anything you didn’t buy. Many credit card companies have safeguards to protect you against unauthorized purchases. For example, Capital One has Zero Liability protection, which means you won’t have to pay if someone uses your card without permission.
Tip: When in doubt, use our mobile app to instantly lock your Capital Card. If it turns out to be a false alarm, you can unlock your card just as easily.
10 Watch out for fraud
Credit card fraud is a real threat, but there are a few simple steps you can take to protect yourself. Monitor your statements, set up transaction alerts and be cautious with your card details online. If something doesn’t feel right, don’t hesitate to contact your credit card company. To learn more, check out our guide on how to spot and avoid scams.
Build better habits, one step at a time
Mastering the art of credit card use takes time and starts with small, manageable changes. By focusing on one tip at a time, you’ll start building the habits that help you achieve financial freedom. Whether it’s paying your balance in full, setting up automatic payments, checking in on your credit score, or taking time to learn more about credit and managing your finances, each action you take today adds up to more impact tomorrow.
1The credit score and report information by Credit Keeper is intended for educational purposes only. Lenders and other commercial users may use a different type of credit score and other information when making credit decisions.
Credit Keeper is a service offered by Capital One and is powered by credit information provided by TransUnion. Availability may vary depending on our ability to verify your identity and obtain your information from TransUnion. Credit Keeper might be unavailable to some Quebec residents.
TransUnion and associated names and logos are trademarks of TransUnion, LLC or an affiliate.
* If Quick Check pre-approves a card, you can be sure we’ll approve your application, except in limited circumstances. Some of the reasons we may not approve your application, among others, include:
a. There’s been a change in your credit file information, personal information or financial status from the time you receive your Quick Check results to the time you apply for one of our credit cards.
b. You’re not at least the age of majority in the province or territory you live in.
c. Your application is flagged for fraud prevention.
d. You have an existing Capital One account.
e. You’ve applied for a Capital One account in the last 30 days or had an account with us that was not in good standing in the last year. In good standing means not past due, over limit, fraudulent, restricted, or part of a consumer credit counselling program or bankruptcy.
In some cases, we may not be able to open an account for you even though your application was approved. This can happen if we’re unable to verify your identity, or you don’t provide the required security funds if you’re approved for a Secured Mastercard®.