The perks associated with having a credit card are well documented – it can help with anything from cash flow issues to large purchases, and can also boost your credit score. So what’s not to like?

In some cases, the temptation of spending too much of tomorrow’s money today can be too strong, and people frequently let their spending get out of hand, accumulating large debts, followed by interest on top of the debt. Defaulting on payments can then lead to poor credit, making it almost impossible to secure a bank loan or a mortgage for some years.

It’s worth exploring the cards available to you, you can see top cards here and this article explores and highlights some simple tips on how to use your credit card responsibly and how to avoid bad experiences.

Pay off your balance as soon as possible

While this may seem obvious, many people often pay the minimum amount required each month, which can be as little as a few dollars, depending on the size of the bill.

If you have payments which remain outstanding for too long, interest fees will begin to be added to the bill, meaning you’ll end up re-paying more than you initially spent on your purchases. The best option is to pay off your balance within the month each month – that way, you’ll avoid paying interest.

Only buy what you need

Making large, frivolous purchases can be a tempting option with your new credit card, but it usually comes back to haunt you.

Using your card for smaller, more repayable purchases such as fuel or groceries will leave you with less to pay back, reduced debt, no interest, and a healthy credit score.

Set personal limits

Another handy tip is to set yourself a limit. For example, if you vow to spend only $100 a month on your card (regardless of the card’s limit), don’t exceed it. Again, this will ensure no nasty surprises end up on your bill and gives you a reasonably small amount to pay back.

As a rule of thumb, never rack up a credit card bill which is bigger than the amount of money you have in your current account.

If your credit card provider offers to increase your limit at any point, you have the right to decline and keep your card’s limit to a reasonable amount, meaning you’ll be able to keep your spending to a strict minimum.

Never skip a payment

While using a credit card responsibly boosts your credit score, the opposite is also true. Missing a payment altogether usually results in late fees, penalty interest rates, and a can make a huge dent in your credit score.

This means that lenders will not look favourably upon you if ever you need significant investment, such as a loan or mortgage from any reputable high street bank or building society.

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