Credit cards can be a beneficial tool in your financial life. Properly using a credit card can allow your credit score to increase, which directly affects other areas of your finances such as interest rates, insurance premiums, and even job applications! At Eastex Credit Union, we aim to help our members understand the importance of credit cards and the implications of using them to their full potential.

Here are 5 tips every credit card user should know:

1. Know the Interest Rate

While an introductory rate of 0% may entice you to sign up for a credit card initially, eventually the introductory period will end which can leave you with a high interest rate on your balance. It’s important to understand what you’re truly signing up for when you sign for a credit card. Choosing a credit card with a low interest rate after your introductory period is crucial to saving you money.

2. Understand the Minimum Payment

Just like it sounds, the minimum payment on your credit card balance is the smallest dollar amount you must pay on your billing cycle to stay current. While it’s important to stay current, it’s equally important to pay more than the minimum amount to eliminate debt faster, save money on interest charges, and maintain a healthy credit score.

3. Request a Raise on Credit Limits

Your credit limit may not be fixed, and may allow for you to request an increase of limits. Consider raising your limit if your income changes or other circumstances allow for it. If your credit limit is raised, it’s important to not use all your available credit to maintain a healthy credit score. Raising your limit can be a powerful tool in boosting your score because it decreases your credit utilization ratio.

4. Make the Most of Your Purchases

Find ways to earn more on your purchases through rewards and perks on spending. Keep an eye out for seasonal promotions throughout the year that can include interest rate promos or points earned when you spend in certain categories. Have your money work for you when you properly utilize your credit card spendings.

5. Know Your Spending Habits

Nobody knows your spending habits better than you. Before applying for a credit card, decide if it’s the right decision for you. There are also ways to limit your spending by setting a spending limit on your credit card. If overspending seems to be an issue, or if you believe that you will not make the payment on frequent purchases, consider only using the card for one-time uses, such as each fuel purchase for your vehicle.

Our Eastex Credit Union representatives can help walk you through the benefits of properly using a credit card, and help with any questions you may have regarding credit repair, credit cards rewards, or applying for a consistently low interest rate VISA credit card!

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