Credit Card Tips

Using credit cards wisely isn't complicated, but the banks will make it seem that way. They want you to overspend, carry balances, and pay interest. They want you to think credit cards are "free money" or "necessary for your credit score." They're not. Here's how to use credit cards without getting fleeced.

1. Treat It Like a Debit Card

Never buy something on a credit card that you couldn't pay for in cash today. If you don't have the money in your checking account, don't put it on the card. Credit cards aren't free money; they're borrowed money that costs 25% interest if you don't pay it back immediately. The bank wants you to think you can "afford" things because you have available credit. But available credit isn't money; it's debt waiting to happen. If you wouldn't pay cash for it, don't put it on a card. This one rule will save you thousands. The bank hates this advice because it means less interest for them. But you'll love it because it means less debt for you.

2. Set Up Autopay for the Full Statement Balance

Set up autopay to pay the full statement balance every month. Not the minimum. Not a fixed amount. The full balance. This ensures you never pay interest. The bank will try to make this hard. They'll hide the "pay full balance" option. They'll default to "minimum payment." They'll try to talk you out of it. But don't let them. Set it up to pay the full balance automatically. Then you never have to think about it. You use the card, and it gets paid off automatically. No interest. No debt. No problem. The bank hates this because they don't make money from interest. But that's exactly why you should do it.

3. Ignore Rewards If You Carry Debt

If you're carrying a credit card balance, ignore the rewards. Earning 2% cash back while paying 25% interest is a losing trade. You're paying $1,250 in interest to earn $100 in rewards. You're losing $1,150. The math doesn't work. Pay off your debt first. Then worry about rewards. The bank pushes rewards cards because they encourage spending. More spending means more interest. More interest means more profit. Don't fall for it. Rewards are a distraction. Debt is the problem. Focus on paying it off. The rewards will still be there when you're debt-free.

4. Keep Your Oldest Card Open

Your credit score is partially based on the length of your credit history. The longer your oldest account is open, the better. So keep your oldest credit card open, even if you don't use it. But here's the catch: The bank might close it if you don't use it. So use it once a year for a small purchase, then pay it off. This keeps the account active and maintains your credit history. The bank wants you to close old accounts and open new ones because new accounts mean new fees and interest opportunities. Don't let them. Keep your oldest card. It helps your credit score, and it costs you nothing if you pay it off.

5. Don't Chase Rewards

Rewards cards promise cash back, points, or miles. But here's the reality: The rewards are funded by merchant fees and interest from other customers. You're not getting free money; you're getting a tiny fraction of what the bank makes. Plus, rewards encourage spending. You might buy things you don't need just to "earn" rewards. The bank loves this. More spending means more interest. Don't chase rewards. Use a simple cash-back card if you must, but don't let rewards drive your spending. The bank wants you to think about rewards. You should think about debt. Focus on what matters.

6. Pay Multiple Times Per Month

You don't have to wait for the statement to pay your credit card. Pay it multiple times per month. Pay it every week if you want. This keeps your balance low, which helps your credit utilization (a factor in your credit score). Plus, it makes it easier to track spending. If you pay it weekly, you see your spending in real-time. You're less likely to overspend. The bank wants you to pay once a month because it's easier to lose track of spending. Don't let them. Pay frequently. Stay engaged with your spending. The more you pay attention, the less you'll overspend.

7. Don't Use Credit Cards for Cash Advances

Cash advances are one of the worst financial products available. They charge 25-30% interest, plus a 3-5% fee, and interest starts accruing immediately (no grace period). On a $1,000 cash advance, you pay $50 in fees plus $25 in interest in the first month. That's $75 to borrow $1,000 for one month. That's an annual rate of 90%. The bank loves cash advances because they're incredibly profitable. Don't do them. Ever. If you need cash, get it from your checking account. If you don't have it, you can't afford it. Don't use a credit card to get cash. It's the most expensive way to borrow money.

8. The Bottom Line

Credit cards are a tool, not a necessity. Use them wisely: Pay in full every month, set up autopay, ignore rewards if you have debt, keep your oldest card open, don't chase rewards, pay multiple times per month, and never use cash advances. The bank wants you to overspend, carry balances, and pay interest. Don't give them what they want. Use credit cards correctly, and they're convenient. Use them incorrectly, and they're expensive debt. The choice is yours. The bank is counting on you to make the wrong choice. Don't.