How to spend smart using credit cards

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No doubt about it, credit cards are a great convenience. Many people find there are many advantages to shopping by credit. Unfortunately, a problem arises when overuse or abuse of credit cards occurs. Excess spending beyond a budget through use of credit can rapidly lead to severe financial problems, including ruined credit and high debt accumulation.

On the other hand, wise spending when using credit cards can offer lots of tangible benefits to consumers. In order to be successful, what this entails is following some basic general rules of thumb when making purchases with plastic.


To experience the advantages of credit while avoiding the dangerous pitfalls at the same time, use caution. By being careful when using credit, you can enjoy some of the tangible benefits that come with plastic.

Pay monthly statement in full

Smart credit card spending means you never carry a balance. Granted, occasionally emergencies arise or a larger purchase needs to be made, but for the most part there is no reason to carry a balance if you live by the philosophy of to never spend more than you can afford. When you keep to budget, you can easily pay your credit card in full each month and enjoy the convenience of plastic.

Track your purchases

Wise credit card use starts with smart spending. It is easy to get caught up in the moment when making purchases by credit, but as long as you track how much you've been spending, you shouldn't accidentally exceed your budget because of carefully kept purchase records. Problems emerge for individuals who just charge without thinking, then are flabbergasted at the end of the billing cycle when the bill arrives and is much higher than they can afford. However, through keeping a running tab of what has been spent makes it much easier to enjoy the benefits of credit without accumulating heavy debt.

Use a rewards card

A good advantage of spending by credit is if you plan smart, you can actually earn on the deal. By using cards that offer tangible rewards (such as cash back), you can get money back periodically based on the amount you're spending. The drawback to this is often the percent of interest charged is higher than other cards. The key is to be sure to pay that monthly bill so you never pay any interest. If you buy everything on credit, earn the percentage for cash-back, and follow through with your intention to pay the bill in full when it arrives, you have a continuous interest free balance and earn for simply using the card.

Keep minimal lines of credit open

Credit card companies love to give promotions in order to entice people to open a line of credit. As a reward, they give gifts, low interest rates (usually temporary), money off purchases or other tangible rewards to tempt people to apply.

While these offers are pretty enticing, it is a bad idea to accept them. Instead, smart credit use entails carrying a minimum of open lines of credit and sticking to those cards. Three cards is generally suggested by experts as a good number of cards to have in possession. No one needs excessive lines of credit, so choose carefully the cards you prefer, and stick with those. This way you keep your credit score looking healthy and aren't carrying large open lines of credit that can jeopardize your credit and put you at risk for theft. Data breaches are a serious issue these days.

To spend smart using credit cards, set up a plan and stick to it. If you practice good credit habits, you won't go into debt and you can reap all the benefits. If you practice smart credit card use, it can save you a lot of headache.