A Guide for Using Credit Cards

Special article brought to you by Wasatch Peaks Credit Union

Using your credit cards responsibly is a great way to boost your credit score and your financial wellness! It can be challenging to stay ahead of monthly payments and easy to fall into debt with credit card purchases. We’re here to help!

Understanding the way a credit card works can help you use it responsibly. A credit card is a revolving line of credit allowing the cardholder to make charges up to a specific limit. Each time the cardholder swipes their card, the card issuer is lending them the money so they can make the purchase.

The cardholder will need to make payments toward the balance each month until the balance is paid off in full. At the end of each billing cycle, the cardholder can choose to make the minimum required payment, pay off the balance in full, or make a payment of any size between these two amounts.

The best way to keep a score high is to pay credit card bills in full each month — and on time. This has multiple benefits:
Build credit — Using credit responsibly builds up your credit history, which makes it easier and more affordable to secure a loan in the future.
Skip the interest — Paying bills in full and on time helps you avoid the card’s interest charges completely.
Stay out of debt — Paying bills in full helps keep you from falling into the cycle of minimum payments, high interest accruals, and debt.
Avoid late fees — Late fees and other penalties for missed payments can get expensive quickly.
Enjoy rewards — Healthy credit card habits are often generously rewarded through the credit card issuer with reward benefits.

During a credit card billing cycle, typically 20 to 45 days, charges will be added to and subtracted from the cardholder’s account. At the end of the cycle, the card holder receives their statement which includes the remaining balance and the payment due date. Once the payment is overdue, it will be subject to penalties and interest charges.

• When making a purchase, treat your credit card like cash.
• Remember that credit card transactions are mini loans.
• Pay for purchases within your regular budget.
• Decrease your reliance on credit cards by building an emergency fund.
• Use your credit card as if it provides you with access to extra income.
• Use credit to justify extravagant purchases.
• Neglect to put money into savings because you have access to a credit card.

Wasatch Peaks is proud to offer credit cards with rewards and cash back opportunities to help you make the most of your money. Get started by contacting our specialists at 801-614-7959 or visit your local Wasatch Peaks branch.

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