Tips for using credit cards to build credit history

ADVERTISING DISCLOSURE

ADVERTISING DISCLOSURE:
Credit-Land.com is an independent, advertising-supported web site. Credit-Land.com receives compensation from most credit card issuers whose offers appear on our site. Compensation from our advertising partners impacts how and where their products appear on our site, including, for example, the order in which they may appear within review lists. Credit-Land.com has not reviewed all available credit card offers in the marketplace.

Credit Card Applications » Research » Guides » Cardholder Benefits » Tips for using credit cards to build credit history

Tips for using credit cards to build credit history

The content is accurate at the time of publication and is subject to change.

Credit cards could be used as helpful instruments to build excellent credit history over a period of time. This credit history will help you save thousands of dollars in the future in the form of interests paid on personal and home loans and insurance premium and also through credit card rewards. Here are some tips that could help you use credit cards the right way to improve your credit score.

Swipe your credit card for all necessary expenses

Your credit history will be better off, if you swipe and repay $500 in 3 months compared to swiping and repaying only $100. The more you spend on your credit card and repay successfully on time, the better it will be for your credit score. However, it is extremely important to remember that you should swipe your credit card for expenses only if you are absolutely sure of your ability to repay the debt. On the other hand if you swipe your card and are unable to pay back the debt, your credit history will suffer.

Low outstanding balance to credit ratio

The credit score depends on the ratio of credit used to credit available. If your outstanding balance is high and almost touching your credit limit, then your credit history will suffer. So your primary aim has to be to make consistent payments on time. This will keep your outstanding debt low and also help in increasing your credit limit after a while, owing to your creditworthiness.

Don’t incur penalties

Making one late payment could lead to higher interest rates for 6 months, assuming you don’t make any more late payments in that period. Similarly, crossing the credit limit would incur over-the-limit fees. Withdrawing cash from ATM using your credit card could lead to cash advance fees. It is important to avoid all these additional charges. Late fees and over the limit fee are seen negatively on the credit file and could lower your credit score. All these additional charges could add to your outstanding debt as well, making repayment tougher. Hence using credit card sensibly involves to what extent you can spend and repay on the credit card.

Set up auto payments with your credit card

Pay your credit card bill on time. But use your credit card to pay your other bills on time too. In fact, set up auto payment with your credit card for phone, internet and other utility bills so that you don’t miss their payments.

Disclaimer: This editorial content is not provided or commissioned by the credit card issuer(s). Opinions expressed here are the author's alone, not those of the credit card issuer(s), and have not been reviewed, approved or otherwise endorsed by the credit card issuer(s). Reasonable efforts are made to present accurate information, however all information is presented without warranty. Consult a card's issuing bank for the terms & conditions.
All rates and fees, and other terms and conditions of the products mentioned in this article/post are actual as of the last update date but are subject to change. See the current products' Terms & Conditions on the issuing banks' websites.
Add to Favorites:
Get the latest news, articles and expert advice delivered to your inbox. It's FREE.

Related Research:

Top 5 Cards for Travel from Our Partners: Summer 2018 – Expert’s Choice

Top 5 Cards for Travel from Our Partners: Summer 2018 – Expert’s Choice

Posted: February 12, 2018

The sun shines more and more each day, flowers are in bloom and you already feel how hot it is getting - summer is here. Summer holidays are almost here, and you are in need of dire preparation. You can lift in spirits and let CreditLand ... Continue reading
Cash Back or Travel Rewards? Here’s How to Decide On The Right Card

Cash Back or Travel Rewards? Here’s How to Decide On The Right Card

Posted: February 10, 2018

If you're trying to find the perfect rewards credit card, you might feel like you're drowning in options. There are just so many out there, and many of them look similar. This can make it tough to decide on a card. One thing people often ... Continue reading
Price Protection: Credit Cards That Will Refund a Price Drop

Price Protection: Credit Cards That Will Refund a Price Drop

Posted: February 8, 2018

Those who often find themselves buying stuff and then discovering that they could pay less for the same item they've just bought, will appreciate this credit card benefit – price protection. This is the least known and the most neglected ... Continue reading
You've successfully subscribed!

Please specify the following:All these fields are optional

Your Credit History
Themes you are interested in:

By providing this information you help us make our news letters more useful and informative. Thank you!