Love them or hate them, credit cards are used by millions and millions of people on a day to day basis. If you use them the right way then credit cards have their advantages but you have to be disciplined with the amount your spend on your card and you have to know your repayment strategy.

Successfully managing your credit card starts even before you have had your application accepted. You need to know that your credit card suits your needs; this may depend on the type of credit card or on the various advantages that a particular card offers.

Ask yourself why? Why do you want a credit card and for what use? Do you want one for emergencies or for transferring another credit card balance to avoid paying interest? These are all questions you need to ask yourself before filling out an application form.

When choosing a credit card try not to fill out an application on impulse based on introductory offers. Take your time and read through exactly what the credit card offers, what are its advantages? An example could be 6 months interest free on purchases, but make sure you check what the interest will be after the 6 month period has ended.

Once you have filled out your application and you are using your credit card on a regular basis, you should always make sure you meet your monthly repayments, and if possible do so a week before your payment is due to show that you reliable and trustworthy to your card provider. This may result in you being rewarded with a lower interest rate in the future.

Not meeting a credit card repayment even for just one month can leave you with red markers on your personal credit record, this can make it harder for you the next time you approach a lender for funds.

I like to stick to a simple rule where I never use a credit card unless I have to; if you have cash on you then why would you use your card? It’s so easy to just hand someone your card and enter a pin number, I bet if you had that amount on you in cash you would think harder before making a purchase!

If you do decide to use your credit card for whatever reason, then setting up automated payments can be a huge advantage. Set up automated payments from your bank account so that whenever you have a balance to be paid; it gets paid off without you lifting a finger, this way you’ll never miss a payment.

Being able to manage a credit card successfully on top of all your other financial commitments including your debts and savings can be quite a challenge, it takes organisation and discipline but if used correctly and for the right reasons then a credit card can be quite a good personal finance tool.

This article was written by Andreas, a financial author for Money Supermarket, a UK based comparison site.


  1. Sustainable PF Reply

    We use our CC for anything and everything we can. All of the time. Carry little cash. We get cash back.

    WE NEVER CARRY A BALANCE. We pay the card every pay cheque. The CC company sent us about $400 in cash back last year which makes their take from us personally (-$400).

    Self control and discipline and we benefit. Seems like a great way to make money to me.

    • @Sustainable PF – I like the cash back reward. Unfortunately, none of my cards offer this feature. ;( But I agree that if you use a credit card, pay it off in full before interest accrues!

  2. Similar to Sustainable PF, we use our CC for everything. We pay the balance in full every month. I am able accumulate frequent flier miles from my purchases. I like the automatic record keeping as well as returns are easier. I normally use just one card to maximize the miles. Every other year, we have enough miles to travel to Europe (first or business class).

    • @Krantcents -It’s totally worth using credit card point for frequent flier miles. The fact you are getting two tickets to Europe every other year is terrific! I don’t use my credit cards for paying my bills since I earn rewards on my debit card (at least for now! Who knows if this will change in the future.) But accruing any kind of points to cash back rewards is completely worth it.

  3. Justin @ MoneyIsTheRoot Reply

    It takes an insane amount of discipline for a lot of people to manage their credit cards properly, and I’m definitely a work in progress myself. But I do agree that the rewards and benefits can be excellent if you manage your CC properly.

  4. @Kevin Yu – credit cards themselves aren’t dangerous – it’s the users of the credit cards that make poor choices. The lack of basic personal finance in education is part of the problem. Few schools teach budgeting basics and credit usage. It’s really up to each individual to do the homework for themselves!

  5. Barb Friedberg Reply

    Very comprehensive. I agree that for many, you are better with cash. Unless you are very disciplined and organized, cash is probably better, especially for younger adults.

    • @Barb Friedberg – I’d probably agree that cash is better for those who have trouble managing their money or those young adults just getting started. Controlling money takes discipline no matter what age!

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