5 credit card tips to avoid debt and build credit

If you use a credit card recklessly, it’s easy to get yourself into debt. On the other hand, if you are smart with your credit card, then you can easily build your credit score. A good credit score can be hugely beneficial, so here are some top tips you’ll need to build your score effectively.

Understand your spending habits

Before you start trying to build credit, it’s important that you fully understand your spending habits. To do this most effectively, we recommend tracking all your expenses, whether essential or optional. Having this detailed report of exactly where your money is going is essential for understanding your relationship with money.

When you understand where you’re spending money, it becomes a lot easier to enforce budgets and prevent overspending. When using credit cards, this knowledge can help stop a downward spiral of debt, instead letting you meet repayments and build your credit score.

Pay more than the minimum

While paying the minimum amount is a choice, it’s not the best financial one. It can quickly lead to overspending, persistent debt, and high interest rates. Perhaps the best method to avoid debt and build credit is to pay off the full amount each month. This will completely clear your balance and ensure you don’t pay any interest on your loans.

Of course, this can be difficult for many, so if you can’t pay back the full amount, then focus on paying back as much as you can.

Use credit cards to build your credit score

If you’re trying to build your credit score quickly and effectively, then you’ll likely want to ensure full repayment of your credit bills each month. In our opinion, the best strategy is to use a single credit card for all your expenses, up to what you would regularly spend in a month.

That means when you receive your salary, you can pay off your monthly statement in full, and repeat the process. Doing this regularly should lead to successfully building your credit score.

If you already have bad credit, you can use this method too. You’ll need to find a suitable credit card for bad credit first, but otherwise, you’re all set to start repairing your credit score.

Choosing the right credit card for your needs

Of course, part of your decision revolves around choosing the right credit card for you. With so many options available, it can be difficult deciding between cashback, 0% interest, air miles, or another perk. For frequent fliers, we fully recommend choosing the air miles benefit, since this can create considerable savings when travelling.

Alternatively, you might want to consider getting cashback or 0% interest. These two perks can help make your money go further, simply by using a credit card instead of your debit card.