While many people fall into the debt trap because of their credit cards, credit cards can also be useful tools for making large purchases or building your credit.

When used responsibly, credit cards can offer several advantages for your financial health. A credit card can be a great way for you to build your credit score and it entitles you to awesome perks and rewards which add more value to your spending.

Avoiding credit card debt

Here are some do’s and don’ts to consider so you can make the most out of your credit cards:

The Do’s:

Do have a major credit card and use it to make small purchases regularly.

Having a credit card that you use responsibly will help build your credit score. The key is to swipe responsibly. Don’t charge more than you can afford. Keep your balance low and be sure to make credit card payments regularly.

Do check your credit report and monthly billing statements.

Spend time each month checking your credit report. You can take advantage of an annual credit report from the three major credit bureaus; Equifax ®, Experian ®, and Transunion ®. By checking your credit report often, you can immediately address any discrepancies or errors in your report. The same principle applies to your billing statements. Whenever you find an error, don’t hesitate to dispute it with the responsible bureau.

Do choose the right credit card.

You can’t simply choose a credit card because of an appealing ad or a friend’s recommendation. Not all credit cards are created equal. Be sure to check the fees and interest and compare the rewards and perks you can get from one credit card to another.       

Do understand credit card fees.

Credit cards almost always come with some type of fees. However, there are certain fees that are avoidable and those that aren’t. So be sure you understand the fees involved when you use your credit card.

The Don’ts:

Don’t carry your credit cards around town.

Carrying your credit cards with you everywhere you go could tempt you into splurging on unnecessary purchases.

Don’t miss your payments.

Late payments can hurt your credit score. Use your calendar, or better yet your smartphone, to track your bill cycles. To stay better organized, download an app like Bills Monitor or Bill Minder to help you stay on top of your payments.

Don’t go beyond your credit limit.

Ideally, you should not be spending more than 20% of your credit card limit. Maxing out your credit cards frequently isn’t good for your credit score.

Don’t carry a balance.

An outstanding credit card balance will result in ballooning interest rates. And over time, you could find yourself overwhelmed with credit card debt. That’s why it’s important to commit to paying off your balance in full and on time each month.

Avoiding Credit Card Debt

With the convenience that credit cards offer, it’s easy to get into debt. While paying off debt can cause headaches and stress, and often requires sacrifice , if you’re proactive and committed, you can turn your finances around. Just remember to use your credit cards wisely, pay your bills in full regularly, and make it a habit to charge only what you can afford.