Opening up new lines of credit allows you to spend beyond what’s in your savings or checking account and helps build your overall credit, making it easier to qualify for loans in the future. To ensure you’ll reap the benefits and avoid costly fines, consider following these helpful tips.

5 Ways to Successfully Use Your Credit Card

1. Avoid Late Fees

Always pay the balance on the statement in full and on time. Any balance that is leftover at the end of the statement period will be charged interest, which increases the overall total as time goes on. Not paying the bill on time can incur late fees and hurt your credit score. Avoid these issues by marking on a calendar the day your statement closes and paying the amount in full before that date.

2. Take Advantage of Bonuses

Many cards offer incentives when you sign up for a new line of credit, which provides a useful way to take advantage of additional money. They usually come in the form of a bonus when you spend a certain amount after first receiving the card. If it’s in your budget, use the card to reach that threshold to receive the bonus. Then, use the funds in your checking account to pay it off, much like you would use a debit card.

3. Don’t Cancel Cards

Credit agencies determine your credit score by factoring in the total lines of credit you have and the average age of each account. The more you have and the older they are, the higher your score will be. Rather than canceling a card when you get a new one, consider using it for specific purposes, such as getting gas or buying groceries.

4. Don’t Apply for Several Cards

Whenever you apply for a new line of credit, credit agencies are alerted by the hard inquiry. If you have too many hard inquiries, it’ll negatively impact your overall credit score as it implies that you don’t have the funds to pay for your expenses. It’s recommended to keep the total number of inquiries to one or two at a time, but understand they’ll disappear after 24 months.

5. Set Up Balance Alerts

Online banking features allow you to receive notifications when you reach a certain threshold on your card. This helps manage your spending. Sign onto your mobile banking app to set up these alerts when you reach the amount of your choosing. This will prevent you from overspending. 

 

If you’re ready to open up a new line of credit, contact First State Bank of Russellville in Pope County, AR. For more than 80 years, their team of experts has helped local residents with a variety of banking needs, and they can set you up with a new credit card that fits your financial needs. Call (479) 498-2400 to speak to a representative, or learn more about their services online.