Smart credit card habits that will keep you out of debt

Features

Understanding credit card features is crucial for managing your finances effectively. Marielle Segarra highlights that simply having a credit card can boost your credit score, especially when payments are made on time 1. Credit cards offer benefits like cashback rewards and fraud protection, which are not available with cash or debit cards 1. However, it's important to be aware of the annual percentage rate (APR), as it determines the interest you'll pay on outstanding balances 1.

The average credit card interest rate right now, according to Forbes, is close to 27%.

--- Marielle Segarra

John Kiernan advises understanding these features to avoid financial pitfalls 2.

   

Choosing Card

Choosing the right credit card involves aligning it with your spending habits and lifestyle. Marielle Segarra suggests evaluating your spending patterns to select a card that maximizes rewards and benefits 3. Some people prefer a single card with a flat cashback rate, while others use multiple cards for different purchases, like travel or groceries 3.

Think about how you tend to spend money, right? Do you splurge a lot on travel or eating at restaurants or online shopping?

--- Marielle Segarra

John Kiernan warns against opening store credit cards for discounts without considering long-term costs 3.