5 Best Practices for Credit Card Use

One of the many payment options you have, credit cards are a valuable financial tool that may build or improve your credit over time when used responsibly. If you are one of the millions of Americans using their credit card to shop this holiday season, take a few minutes for a refresher on some of the best practices for credit card use.

1. Use your credit card by charging only what you know you can comfortably afford to pay back.
A credit card is a convenient way to pay for everyday expenses. Or, it can also be a great tool to finance a purchase you can pay off over time. However you use yours, it is important not to overspend nor use it for unnecessary purchases. If you overspend and cannot pay off your balance, you will end up paying interest on those purchases. Credit card expenses mainly stem from carrying large balances. A good rule of thumb is to only buy what you could afford to pay for with cash.

In some cases, you can also pay off debt quicker by transferring a higher-rate balance to an Arbor Financial credit card and see if you qualify for a lower, competitive rate*.  You may be able to pay off your balance faster and with less interest.

2. Pay off the amount in full every month to avoid interest charges.
The payment history on your credit card is reported to the three major consumer credit bureaus. Credit card payment history accounts for around 35% of your credit score, so it is crucial to make timely payments in full.

If you are unable to pay in full, make at least the minimum payment on time. Doing this will help to establish a pattern of responsible borrowing and help you avoid paying interest charges. When done consistently, this can help boost your credit score.

Learn more about why you should pay more than the minimum balance on your credit card. 

3. Never pay your bill late.
Your payment history is one of the major influential factors of a credit report, which is why it is essential to pay your bill on time. Timely payments help keep your interest rate low and improves your overall credit health over time. When your bill arrives, you can pay a minimum amount, pay in full, or another amount in between. However, as discussed previously, paying off your amount in full will help you avoid incurring interest charges.

4. Log in to your online banking account to keep track of your balance and verify transaction activity.
With digital payment options growing, paper trails are becoming scarcer. As a result, it is important to log in to online banking to track how much you are spending and how much is left. A good rule of thumb is to check in at least once a week.

While tracking your balance, it’s a good idea to verify transaction activity to avoid any fraudulent charges. If you experience unauthorized transactions, notify Arbor Financial Credit Union at 269.375.6702 or 800.442.7340 immediately. With Visa’s Zero Liability Policy, cardholders can shop with peace of mind knowing that they won’t be held responsible for unauthorized transactions – whether online, in stores, or over a mobile device ⁺. 

5. Make a budget and stick to it.
After being approved for a credit card, Arbor Financial will authorize a credit limit, or the maximum amount you can borrow, to be used. Credit limits depend on several factors, including income and other debts. It’s important to stay well below your limit to avoid overspending.

Creating a budget can help you stay on top of your finances by helping you plan where your money will go instead of asking where it went. A credit card should be used as a compliment to your budget. By working through pre-determined spending limits, you can avoid overspending and stay below your limit. You can always ask a member of our Card Services Team to lower your limit.

Before you open a new credit card account, it is important to know how they work, the benefits and costs associated, and how to responsibly manage them. For more education on credit card usage and more financial topics, visit Level Up, our free educational resource with modules that are short and easy to understand for your own financial situation. You can also explore our robust on demand library of webinars and classes on budgeting, credit scores, debt consolidation, and more.

When you’re ready to open a credit card account, remember to do your research and choose the credit card that’s right for your situation. Arbor Financial offers very competitive credit card rates and member perks. Get started today by applying online, scheduling an appointment, or calling 269.488.5945.


* Subject to credit approval and underwriting review. Rate is variable and may change. Programs, rates, terms and conditions are subject to change without notice.
+ Visa’s Zero Liability Policy does not apply to certain commercial card and anonymous prepaid card transactions or transactions not processed by Visa. Cardholders must use care in protecting their card and notify their issuing financial institution immediately of any unauthorized use. Contact Arbor Financial for more detail.