Credit CardAlthough most people think credit cards would increase their debt, they’re very viable tools for helping you build credit. Keep in mind though that building credit through the use of short-term debt would require a well-thought-out plan and a steely resolve not to overspend. Done right, a credit card could help build your credit, without worrying about debt. How? Here are some tips.

Pick The Right Credit Card

With all the various options out there, it’s quite difficult to pinpoint which credit card would suit your needs best. To help you out, look for the following features in credit cards, suggests an experienced financial advisor in Lexington, SC:

  • Waived annual fee for the first year of use or no annual usage fee
  • Low monthly interest rates
  • A credit card you could use virtually anywhere such as American Express, MasterCard, or Visa
  • A credit card that gives something back such as transferable points, cash back, or airline miles

Pay Your Credit Card Bill On Time, Every Single Time

Your credit score could significantly go down if you fail to pay your monthly credit card bill on time, and you would need to pay more next month. So instead of not paying your entire bill, consider making at least a minimum payment before the due date.

Use Your Credit Card Regularly, But Avoid Using Credit

It’s ideal to use your credit card for things you regularly buy such as bills, groceries, eating out, gas, etc. so that you could show how financially responsible you are and build good credit. However, you must be careful to avoid taking on debt, meaning that you should only use a card for things that you could comfortably afford so that you could pay your bill in full every month.

Consider Keeping Your Credit Card Open

Even if you have another card that offers better benefits, consider keeping your older one open even if you don’t regularly use it. This could give your credit a boost because it would show how responsible you are with your spending habits.

Yes, credit cards are beneficial for many different reasons, but they don’t usually get proper credit for helping people build good credit. Even if your credit score is on the lower end, it’s possible that you could bounce back by using your credit card responsibly. So keep the tips above in mind, spend wisely, and you could improve your credit sooner rather than later.

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