Try using a budget like the 50/30/20 method, which suggests spending 50% of your take-home pay on necessities like housing and groceries, 30% or less on items you want but don’t need, and 20% or more on savings and paying off debt. That will help keep your credit card spending in line with your income and other saving and spending priorities. Paying on time is also important because payment history is the biggest contributor to your credit score, the three-digit number that lenders use to evaluate your credit usage. Aim to pay every single credit card bill on time to keep your score strong. Paying only the minimum adds interest to your balance each month until you finally pay in full. Your balance will only decrease by a small amount each month, since a portion of your payment will be applied to accrued interest. The bottom line? Pay your balance in full each month to avoid paying interest. If you create an online account or download the card’s mobile app, you can check your transactions in real-time and spot errors much sooner. You can even set up alerts that may help you catch suspicious activity right away. Then, don’t let your rewards collect dust. Depending on your credit card, you can redeem rewards for a statement credit, a check to your bank account, travel, hotels, gift cards, and more. Some rewards have an expiration date, which means you’ll have to use them or lose them. Check your card’s fine print for its expiration policy.
