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How to Use a Credit Card Wisely

Last Updated: September 19, 2024

4 min read

Table of contents

Key Points:

When used responsibly, credit cards can help build or rebuild credit.
Keep your credit card information secure, don’t loan your card to friends, and don’t share images of your credit card on social media.
On-time credit card payments demonstrate responsible use and is an important factor in your credit score.

When you use a credit card responsibly, it can offer you more convenience than paying by cash or check. Plus, you may have benefits such as fraud protection and rewards on your purchases. Most important, by using a credit card responsibly you can build (or rebuild) credit, which can benefit you financially in other ways.

How to responsibly use a credit card

Let’s examine how keeping your credit card information secure and staying aware of terms on your credit card (like your interest rate) can help with responsible credit card use.

Keep your credit card secure

A big part of using a credit card responsibly is to keep your credit card information safe. Store your credit cards in a secure place and always out of view in your car or at your workplace. You should never loan your cards out to others, share your credit card information or numbers, or post images of your credit card to social media. If you lose your card or it’s stolen, immediately contact your card issuer. You can find their customer service number on your credit card statement and through your mobile banking app.

If your credit card is lost or stolen and unauthorized purchases are made, you may only be responsible for up to $50 because of the federal Electronic Funds Transfer Act. Some credit card issuers may offer even more protection. For instance, Discover offers a $0 Fraud Liability Guarantee, where you’re never held responsible for unauthorized purchases on your Discover Card.¹

Did you know

Discover offers Freeze it^®. Freeze your account in seconds with an on/off switch either on the mobile app or website to prevent new purchases, cash advances and balance transfers.²

Examine your monthly statements

Another aspect of using a credit card wisely is to be aware of any fees you’re charged, your spending limit, and your annual percentage rate. These items can be found on your credit card statement.

If you need to carry a balance, which accrues interest, you may want to use your credit card as sparingly as possible—or only for emergencies—to avoid finding yourself burdened by high-interest debt. However, if you pay off your card balance every month, you can maximize your credit card rewards by using your credit card more frequently.

Responsibly contribute to your credit

One important benefit of using a credit card is to add to your credit history. Good credit scores may allow you to gain access to new lines of credit and the best interest rates offered on a personal loan, auto loan, or home loan.

Let’s review some responsible ways to use your credit card that contribute to your credit health.

Make on-time credit card payments

Typically, the most important factor in a good credit score is your payment history. Making on-time payments to your credit card account is essential to responsible credit card use.

Many credit card issuers offer resources to keep payments top of mind.

Payment alerts. When trying to build credit, one missed payment is too many. You can set up a “Payment Due” alert with your credit card issuer and be texted or emailed. You might also manually create your own reminder that notifies you before your bill is due each month.
Auto-pay. You can also enroll in automatic payments, which allows your credit card company to automatically deduct the monthly balance from a linked checking or savings account.

Avoid excessive credit card debt

Credit cards allow you to spend money that you may not have in hand at that moment, which creates debt that you can choose to pay off partially or in full before your billing cycle due date. While you may want to use a credit card to pay for some smaller items in the short term, you also may want to avoid incurring a large credit card balance that can take a long time to pay off.

To avoid credit card debt, it’s important to only spend within your means. It’s also critical to pay off as much of your outstanding credit card balance as possible each month and not just make the required minimum payment.

The most responsible way of using your credit card is to charge what you can afford and then pay off your balance in full and on time. By not carrying a balance, you not only avoid paying interest on purchases, but are using a time-tested strategy for building credit.

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Maximize your credit card rewards

Many credit cards offer rewards. When you’re choosing a rewards credit card, the best credit card for you is the one that rewards the way you live and spend—whether that means cash back or miles. Whichever type of reward you prefer, there’s no reason why you shouldn’t get something back when purchasing the things you need to buy anyway.

By taking a few of these steps to use your credit cards responsibly, you can continue to enjoy all the benefits of card membership while minimizing the risks.

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