What are some tips for using a credit card responsibly?

Whether you are looking to avoid bankruptcy or are starting over after one, responsible use of a credit card can be a great way to manage your finances and rebuild your credit. However, it’s not always easy to know exactly what the best practices are, especially if you have made mistakes in the past. According to TIME Magazine, following a few useful tips can help keep you on track.

Credit cards can vary widely when it comes to their terms, interest rates and rewards. While applying for the high-end card that offers large cash back incentives may seem like a good idea, if your credit isn’t top notch you will likely be rejected. Therefore, knowing what your credit score is and what types of cards you are likely to be approved for is an important place to start.

After you are approved for a card, you will be assigned a limit as to how much you can charge. While that number represents the maximum amount the lender will give you, spending the full amount and maxing out your card isn’t a good idea. To protect your creditworthiness, you should aim to not spend more than 20 to 30 percent of your credit limit.

Once you beginning using your card, you will need to make payments. Missing payments can reflect badly on your credit score and may result in late fees and an interest rate increase. In the event that you mistakenly miss one payment, you may want to contact the lender and request that the fee be waived. Finally, carrying a large balance on your credit card can not only negatively affect your credit, but can also result in you spending more in interest over time.

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