How to Use Your Credit Card Responsibly: 6 Tips
When used responsibly, a credit card can be an effective tool to establish your credit history, improve your credit score, and earn points or rewards. Paying your credit card bill on time and in full can help you to achieve these goals.
On the flip side, irresponsible credit card use, including late payments and overspending, can lead to a poor credit score and a lot of debt. If you’re thinking about getting your first credit card or just looking for tips on how to use your credit card responsibly, this article’s for you.
1. Check Your Credit Card Statement Regularly
Each month, your credit card company will send you a credit card statement. Your statement is an online or paper document that contains account and spending information from your billing cycle. The information on your statement can include:
Current account balance
Previous account balance
Start and end dates of your current credit card cycle
Available credit
Minimum payment due
Payment due date
Cash advances
Interest rate
Fees
Reviewing your credit card statement each month is a good way to track your spending. Your statement acts as a convenient reminder of how much you’ve spent, what you owe, and the interest rate associated with regular purchases and cash advances.
Checking your statement regularly can also help to detect any errors and can protect against fraud. If you see an unfamiliar transaction, you should report it to your credit card issuer.
2. Make On-Time Payments
If you are trying to establish or improve your credit score, paying your bill on time is one of the most important things you can do. While your credit score is composed of several factors, payment history accounts for the largest portion (35%). According to internal data from Borrowell, a single missed payment can decrease your credit score by as much as 150 points and can remain on your credit report for up to 6 years. You can also expect to get hit with a late payment fee.
Paying your credit card bill on time can help you avoid high-interest charges. Consistent, on-time payments show lenders that you can manage your credit responsibly, making you more likely to get approved when you apply for a new loan or credit card.
By paying your bills on time and in full each month, your lender may also offer to increase your credit limit. A higher limit can reduce your credit utilization ratio (how much of your available credit you are using) which can improve your credit score.
If you struggle to make your credit card payments on time, you can consider setting up automatic payments. Automatic payments are when you set up a payment to automatically come out of your bank on a set schedule. Many credit card companies offer this as an option and allow you to decide if you want to auto-pay the minimum payment, the full balance, or some other amount. You can contact your credit card issuer to see if they offer auto-pay.
3. Pay More Than the Minimum
If possible, aim to pay your credit card in full each month. If you can’t pay in full, you must pay at least the minimum amount. Failing to do so can result in an increased interest rate or damage to your credit score. If you can only pay the minimum on your credit card each month, know that it will take you longer to pay off your balance, and you’ll pay more in interest.
For instance, let’s say you have a credit card balance of $1,000. Your minimum payment is $30 (3% of the balance you owe) and your interest rate is 20%. If you only make the credit card minimum payment of $30 per month, it will take you 10 years and 11 months to pay off your original balance. You will also spend $990.60 on interest. This means you will pay nearly the same amount in interest as your original balance of $1,000.
Now let’s imagine you have the same balance of $1,000. You still can’t afford to pay off your full balance but you can manage to pay $100 per month. In this case, it will only take you 1 year to pay off your full balance and you will pay $103.04 in interest.
The best scenario is to pay off your balance in full each month so you pay nothing in interest.
4. Avoid Using Your Credit Limit
Your credit utilization ratio is a calculation of how much of your available credit you’re using. Your credit utilization is important because it accounts for 30% of your credit score. Experts recommend trying to keep a credit utilization ratio of less than 30%. To calculate your credit utilization ratio:
Add up all of the balances on your credit cards (how much of your credit is in use) to get the total balance
Add up all of the credit limits on your cards to get your total credit limit
Divide the total balance by the total credit limit
Multiply by 100 to get your credit utilization ratio percentage
For instance, if you have $1,000 in total credit limit and you’re running a balance of $800, you have a credit utilization ratio of 80%.
Total balance ($800) / total credit limit ($1,000) = 0.8 x 100 = 80%
A credit utilization ratio of 80% can signal to lenders that you might be overextending yourself. Keeping your credit utilization below 30% and paying monthly payments in full demonstrates that you can responsibly manage your credit. So, if you have $1,000 in available credit, you want to aim to keep your balance below $300.
5. Avoid Overspending
It’s easy to spend money with a credit card. You can’t see the money leaving your bank account and it’s not even necessary to have the money available in your account before you spend it. However, overspending on your credit card can have significant consequences. It can make it harder to pay your balance, resulting in more of your money going to interest. With more of your money going to debt repayment, you have less money to spend elsewhere. Overspending can also reduce your credit score by increasing your credit utilization ratio. When you spend too much using your credit card, it’s an easy way to find yourself in a pile of debt that is challenging to get out of.
One way to avoid overspending is to use your credit card like it’s a debit card. This means you don’t spend the money unless you know you can pay it off. Making more frequent payments throughout the month can prevent you from racking up an unmanageable balance, and can also help to keep your credit utilization ratio low.
6. Read Your Card Agreement and Terms
If you sign up for a new credit card, always review your credit card agreement and terms. If you find the document too complicated to understand, reach out to your credit card company and ask them to walk you through it. Your credit card agreement and terms outline the details related to your credit card and how you use it. This document can include the following information:
Credit card limit
Interest rate
How interest rates are calculated
Minimum payment calculation
Applicable fees (annual fee, over-limit fee, etc.)
Consequences if you don’t make your minimum payment
How to contact your credit card issuer
Credit card expiration date
Your rights as a consumer
When you know the details of your card agreement and terms, you know what to expect. If you understand all of the potential fees and how they are triggered, you can avoid these scenarios and save yourself money.
The Bottom Line
When used responsibly, a credit card can be a convenient way to make everyday purchases while improving your credit score. However, if you don’t know what responsible credit card use looks like, it’s easy to overspend and rack up credit card debt. Use these six tips for how to use your credit card responsibly and develop positive credit card habits. Review your statement to stay aware of your spending, and focus on paying your balance on time and in full each month to avoid accumulating credit card debt and paying interest.
What is a Borrowell discount coupon?
At 1001couponcodes.ca we believe that getting a discount is much more fun! So we offer the best discount coupons Borrowell for free. Together we also provide special offers, links, exclusives and many promotions totally at no cost to you.
On our coupon site you can find Borrowell special offers and deals Borrowell, plus thousands of offers from the largest and best online stores in Canada and the world, we filter only the most trusted stores with good customer service. We also check out store specials and make them available to our most special readers. You can make your purchase at Borrowell and get a discount using the Borrowell discount coupons that we update daily.
We usually highlight coupons that are valid for the entire store, in percentage and then fixed value.
Our goal at 1001couponcodes.ca is to follow the whole internet and publish on this portal all the savings opportunities when it comes to buying, either in the form of discount coupons or event offers. For example, check out our 1xgames Coupon Codes or HIDE MY IP Coupon Codes, they have daily new offers and coupon codes. Through discount coupons, our readers get exclusive discounts on their purchases at Borrowell and thousands of other establishments. Our site is free, here nobody pays anything to use a discount coupon!
The Borrowell discount coupon (also known as a voucher, gift certificate, discount voucher, promotional coupon, discount code, or promo code) are codes used by online stores to convince undecided customers to complete their purchase. If you enjoyed the discount offered by our coupons, we recommend that you checkout immediately as they have very limited validity.
How to use this discount coupon Borrowell?
The Borrowell coupon can appear in two ways, a code to enter in the shopping cart during checkout, or a specific link that applies an automatic promotion or redirects to a special offers page. Here's a walkthrough to understand how to use the discount coupon Borrowell:
- click on "get coupon";
- copy (ctrl c) the coupon code and click "go to store";
- Some coupons are available in link format, so be smart, because when you enter the store you should realize the discount applied to the products;
- navigate to Borrowell and choose the product you want. put it in the shopping cart, paste the coupon (ctrl v) into the field called "discount coupon" or "gift card";
- see if the discount was applied correctly. the best coupons expire soon, so we recommend finalizing your purchase.
- If you enjoyedTell everyone how you got a discount on Borrowell!
What is a Borrowell coupon code?
A coupon code from Borrowell is a alphanumeric code that you use to get the discount on your order. These Coupon Codes are also called coupon code, promotional code, discount code, promo code or voucher. Webshops from around the world use these types of codes to give discount to their customers on certain products or orders.
How can I use a Borrowell coupon code?
An action code or promotional code from Borrowell Can be used in two ways. The first way is by simply clicking on "SHOW CODE", copy the code and paste it into the shopping cart of the webshop. The other way is by clicking on 'VIEW OFFER', you will then be redirected directly to the webshop and the discount will be applied automatically.
How do you find a couponcode at 1001couponcodes.ca? First of all, look for the desired store in the search bar at the top of this page. Are you looking for a particular product or brand? Then you can type it in the search bar. You can also find your desired webshop in our "SHOPS A-Z" or "CATEGORY" overviews. If you've come to our webshop page, choose a coupon code or offer you'd like to use.
- Copy the couponcode from Borrowell by clicking at "SHOW CODE" or "VIEW OFFER"
- Does a coupon code appear? Then you can copy the code by clicking at the button "COPY"
- Does the modal not show a coupon code? Then you can click directly in the big blue button "VISIT Borrowell
- On the Borrowell website select one or more products and place it into the shopping basket. When you are finished, then have a close look at the basket. Just before the actual checkout, there is somewhere the option to enter an action code, promo code, voucher or coupon code. You paste (CTRL V) here the previously copied code and the discount is applied immediately.
- Please check if the discount has been applied correctly, as it may occur once you're just late and the coupon code has expired. It may also be that the coupon code is only valid for a particular product. In that case, you can just get a new coupon code from our website. It is therefore important that you read the terms of the coupon code.
- Successfully? Then share our Coupon Codes, promotional codes, promotional codes and offers with your friends and family, so they can also make use of additional discounts.
FAQ
What are the current promo codes or offers available for Borrowell in December 2024?
Currently, promo codes and 4 deals available for Borrowell:
Get Your Free Credit Score Today! Financial Freedom Awaits!
Credit Score Check: Free
Free Credit Score Check
How much can I save at Borrowell?
In the last 30 days, 4 members have saved on average at Borrowell.
How do I use Borrowell coupons?
To use a Borrowell coupon, copy the related promo code to your clipboard and apply it while checking out. Some Borrowell coupons only apply to specific products, so make sure all the items in your cart qualify before submitting your order. If there's a brick-and-mortar store in your area, you may be able to use a printable coupon there as well.
How many Borrowell online coupons are available?
There are currently 100+ Borrowell online coupons reported by Borrowell. These deal offers are available online, including coupon codes. Today alone, users have collectively cashed in on 4 offers.
How to save money at Borrowell?
You can save money at Borrowell by using one of the current Borrowell coupons from 1001couponcodes.ca. Right now, the most you can save is .
How long do Borrowell coupons last?
The Borrowell promo codes that are currently available end when Borrowell sets the coupon expiration date. However, some Borrowell deals don't have a definite end date, so it's possible the promo code will be active until Borrowell runs out of inventory for the promotional item.
The entire content of this site is copyrighted (all rights reserved © 2024).
