Getting a credit card can be rewarding, especially when you consider all of the perks that might come along with it. You might be excited about earning points, cashback rewards, or miles toward your next trip. But a lot of people don’t really know how to use a credit card responsibly. From staying well below your credit limit to paying your credit card bill on time every month, there are rules to using your credit card correctly so that you can avoid falling into debt and reap all of the rewards.

Take a look at five things to know about credit cards in 2020.

1. Make Payments on Time

Make sure you pay your credit card bill on time each month. Paying a credit card bill late doesn’t look good to other lenders. When the time comes to apply for a new card, it could hurt your chances of getting approved. Making payments on time can ensure that:

  • Your accounts stay out of collections
  • You avoid late fees
  • Your monthly payment is lower
  • You get a lower interest rate

Keep track of when your credit card payment is due by writing it down or putting the date in your phone so that it reminds you a few days beforehand that your bill is due and you can prepare for it ahead of time.

2. Pay Your Bill in Full Every Month

Carrying a balance on your credit card means paying interest, and it’s not a great way to build your credit. Paying your bill in full every month is a great way to increase your credit score over time. That means you should only charge what you can afford to pay off every month, so if you can’t really afford that new pair of designer shoes or that new MacBook, your best bet is to wait until you can and pay with cash or a debit card. Don’t blow up your credit just for the sake of buying things you could save up for instead.

3. There Are Perks for Military Families

If you’re a member of the military or a military vet, there are cards designed just for you. For instance, USAA offers several credit cards geared at military families that offer perks like:

  • 3X points on dining out
  • 2X points on gas and groceries
  • 1X points on all other purchases
  • 2,5000 bonus points after your first purchase
  • 5 percent cash back on the first $3,000 in a combined gas station and military base purchases yearly

Learn more about USAA’s credit card offerings for military families to find a card that’s right for you.

Credit Cards

4. Monitor Your Credit Account Activity

It’s always a good idea to monitor your credit activity to ensure no one else has been using your card number without your knowledge. Identity theft is a real issue so make sure all of your credit card activity looks right. Make sure there are no charges that look unusual. Monitoring your credit now is more important than it ever has been because credit card fraud may be on the rise during Covid-19, according to some sources. So make sure to check your statements each month to ensure there are no fraudulent charges on your account.

5. Stay Well Below Your Credit Limit

Financial experts recommend staying below 30 percent of your limit on your credit cards and some say for even better results to stay between 10 to 15 percent of your limit. That shows lenders that you’re not overextending yourself. That means maxing out your card each month isn’t something you should be doing. If you want to build credit and reap the rewards of better cards down the line, you have to be disciplined.

Improving Your Credit

Now that you know how to use a credit card in 2020, you can start making changes to ensure you’re on the right path to becoming a financially savvy credit card user. Not only will you be able to enjoy the perks of having great credit cards, but you’ll be boosting your score so that in the future you can make even bigger purchases like a home or a car. Put the above into practice and you should see a drastic improvement in your credit.

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