Stressed out woman with 3 credit cards

With responsible use, a credit card can benefit your finances in a number of ways. Conversely, if you take the wrong approach, it could cause more harm than good.

Here are three tips to follow to avoid the most common credit card pitfalls:

  1. Pay off your balance in full every month. Not only does this allow you to avoid interest, but it gives you a clean slate at the beginning of each cycle. This helps prevent a situation in which debt begins to accumulate.
  2. Think twice before using your credit card. With access to credit, you know you can make purchases that you can’t truly afford. This is what you need to avoid. If you don’t, the chance of paying off your balance each month is not nearly as good.
  3. Don’t miss payments. Missing a payment will harm you in many ways. In addition to the late fee and tacked on interest, this could have a negative impact on your credit score.

Final tip: get something in return for your credit card use. The best way of doing so is to opt for a reward credit card. With this, you receive points for every dollar you spend. Over time, once you accumulate enough points, you can cash these in for everything from cash back to travel (and much more).

It is much easier to avoid the most common credit card troubles when you follow these tips. You may have to adjust your financial approach, but in the end you will be glad that you did.

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