4 Important Things To Know About Using Credit Cards

When you use a credit card right, it can be a helpful budgeting and reward tool. If you have credit cards, make sure you are making your card work for you.

Important Thing #1: Sign Up for Balance Alerts to Stay on Budget

With most credit cards, you can sign up for a balance alert. With a balance alert, you will get either a text, email, or both when your credit card reaches a certain balance.

A balance alert can help you stick to your budget and can be especially useful if you try to use your credit card for most purchases. With a balance alert, you will know when you are hitting your personal spending limit.

Important Thing #2: Use Balance Alerts to Keep Your Credit Utilization Low

You can also use a balance alert to make sure you are not utilizing too much of the available credit on your card. You don't want to use more than about a third of the credit on an individual card if you want to keep your credit score up.

You can set-up your credit card so you can an alert when you are nearing the point where you are utilizing a third of your credit card. You can use the alert as a payment reminder to keep your credit utilization low.

Important Thing #3: Analysis Tools Can Help You Stick to Your Budget

Most credit cards offer tools that analyze your spending and break down what you are spending money on. For example, your credit card may have tools that allow you to see how much money you are spending on groceries, gas, restaurants, and bills.

If you use your credit card for all or most of your purchases, you can use these tools to analyze your spending. You can get helpful analysis that will allow you to see if you are sticking to your budget, and to see what areas you are on track on with your budget, and in what areas are you overspending. You can use these analytics tools to make smarter choices with your money.

Important Thing #4: Consider Making Mid-Cycle Payments

Don't wait until the end of your billing cycle to make a payment on your credit card. Instead, make mid-cycle payments on your credit card, paying your credit card off every two weeks. Your credit balance or credit utilization plays a big role in your overall credit score.

That information is reported throughout the month to all three credit reporting agencies. By paying off your credit card every two weeks, instead of once a month, you increase the chance that a low credit utilization will be reported to the credit agencies that calculate your credit score.

Your credit card can be an important tool you can use to stick to your budget and earn rewards at the same time. Just make sure you are keeping your credit utilization on your cards below a third of the limit. Making payments on your credit cards every two weeks is a great way to make sure you keep your credit utilization low while allowing you to reap rewards benefits and enjoy the financial analysis and budget tracking tools your credit card can provide you with.