How to Use a Credit Card for Building Good Credit


If you want to build a good credit history, you need to recognize that good debt and bad debt are two different types of debts.

You will reap the reward of attaining a good credit score if you make sure that you use your credit card with caution.

Try to practice these tips if you want to use your credit card to create a solid credit history:

  1. Do not accumulate an abundance of different credit cards.
    If you have an excess amount of credit cards, the credit bureaus will look at this in a negative way, and your reports may reflect a lower credit score. All you need is one or two credit cards. Usually, a MasterCard or Visa along with a card for gas or a favorite store is sufficient for your needs. Buy items with these selected cards on a regular basis, and make timely payments.

  2. Do not overextend the limit on your credit card.
    You can request a higher limit or a lower limit, or you can ask that your limit remain the same unless you make a request to change the amount. This will help keep your spending from getting out of control. Keeping your limit set to between $500 and $1000 typically works well enough.

    • If you are not tempted to spend too much money on items you do not need, it benefits your more if you can get the credit card company to raise your limit. If you limit your credit card usage to 25 percent of your permitted limit, you may end up with a higher credit score. However, if you need lower limits to prevent going on spending sprees, then do not ask for increased limit amounts.
  3. Pay balances off in full.
    It does not matter what the amount of your balance is during your credit card cycle; the best thing is to pay the amount in full before or on the due date. If you want to demonstrate to credit bureaus that you use your credit card correctly, always make it a habit to pay your total balance every month by the payment date.

    The majority of credit cards carry a very small minimum monthly payment. The reason for this low minimum monthly payment is that if you pay a minimum amount of $15 when your bill is more than $500, you will end up paying heavy interest payments. Always pay the full amount that is due, and never pay only the minimum balance.

  4. Make payments on time.
    Take great care to remain aware of the due dates for your credit card payments. If your payment is late, you could be subject to a penalty, a higher interest rate, or loss of credit availability. In addition, it could have a negative impact on your credit score. You can build a good credit history if you make it a practice to refrain from abusing your credit card.
  5. Stay away from the free offers.
    Occasionally, you may fill out a credit card application that also presents you with the chance to obtain a free T-shirt, pepperoni pizza, or another gift item. There is no harm in simply signing up, right? If the only things you want to receive are free benefits and you cancel your credit cards as soon as you receive these benefits, this practice can hurt your credit history.

    A cancelled credit card will appear on your credit report. You may receive a lower credit score because a cancelled card appears on the three major credit bureau reports. Skip applying for anything that you don’t intend to follow through with.

Remember these tips whenever you fill out an application for a credit card or whenever you use your current credit card to make purchases. Do not even fill out an application to get a credit card if you believe that you are incapable of using it with caution.

It is very simple to allow your credit card bill to go beyond acceptable limits, so it is wise to use your credit card with prudence. You will be happy if you only use your credit card to create a good credit history.


About Exceptional People Magazine

Exceptional People Magazine is where self empowerment, hope and inspiration happen. I’m Monica Davis the founder of Exceptional People Magazine and my mission is to enhance the quality of life of all people by promoting goodwill, unity and better living through positive media. Through this magazine you will be inspired to reach new heights.

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