Best And Worst Ways to Use Your Credit Cards


Credit cards are like a power saw. Use them right and you can easily do things with much less effort than without.

Here are the best and worst ways to use your credit cards, and how in some situations, one of the worst ways actually becomes best.

Credit cards are tools that let you buy things now but pay for them later. However, as they say, the devil is in the details, and here are the most important details.

The Basics

This is the most the issuer is willing to let you owe them, even for the short period until your next payment is due. If you try to charge something that results in your balance going over this limit, the issuer may decline to pay.

Credit Limit

Minimum Payment

This is the smallest amount you must pay back each month to avoid serious negative consequences, such as penalties and lower credit scores.

This is what the card issuer charges you just for having their card. Most cards these days have a $0 annual fee. However, some types of cards, especially higher-end travel cards, charge hundreds of dollars a year.

Annual Fee

How To Get Your First Credit Card

1. If you’re in college, find out if any card issuers offer cards to students at your school. Normally those are much easier to get than trying on your own.

2. Get a card issued by the bank or credit union where you have checking and savings accounts. When I first came to the US as an adult with zero credit history in this country, this is what I did, getting a card from the State Employees Credit Union (SECU) of Texas.

3. If you can’t get your bank or credit union to issue you a regular credit card, ask them for a secured card — this means you deposit a certain amount in an account with them that you’re not allowed to withdraw, and your credit is limited to that amount.

4. If even that isn’t available, try to get a joint card with your parents, assuming they have decent credit scores.

The most critical thing, if you do nothing else that I recommend — buy with plastic ONLY those things you would still buy if you had to pay cash.


Every month, pay off your balance in full. If you can’t do that, pay as much as you can and stop using credit until your balance is back to $0.

Some people recommend that you set up automatic payments from your checking account. I disagree, since you stop seeing how much money you’re charging each month, which may lead to your spending more than you should