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Credit Cards

Playlist: Credit Cards

Tips on Using a Credit Card

Tips on Using a Credit Card Avoid spending money that you cannot reasonably expect to repay within a short period of time.

Pay attention to interest rates.

Often banks offer a low "teaser" interest rate as an incentive to open a credit account.

These low rates expire over time, and the bank charges a higher interest rate on any debt that you have not paid off.

The interest you will be charged is called the Annual Percentage Rate, also known as your APR.

Be aware that some interest rates on credit cards are as high as 29%, and in some cases more, depending on the terms and conditions of the credit card.

You will not be able to pay off the card if you only pay the minimum amount due.

If you need to carry a balance, be sure to pay on time.

Pay more than the minimum amount owed, and keep your overall balance below 30% of the credit card limit.

This will allow you to pay off your debt and not be charged as much interest.

Make your payments on time.

If you miss a payment or make a payment late, you will be charged fees, your APR may increase, and it will be reported to the credit bureau.

This can negatively affect your credit score.

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