How To Use A Credit Card Smartly

Written by Nancy Altilia

Wednesday, January 2nd, 2019

I was one of those kids who got a credit card while I was still in my teens. A few (OK, several) decades later, and I still remember the advice my banker gave me: "Plan your spending so you can take almost two months to pay it back." She would make any big purchases the day after her statement was issued so the item did not appear until the next month's credit card statement. That gave her another few weeks to pay without any interest charges. She was using the card to borrow over the short term, at no cost. That's a power tool.

Like her, I don't use my credit card for anything I can't pay off promptly. In fact, it's become a quest to always use the credit to my advantage and never pay interest.

To harness the power of a credit card, I have formed a few simple habits:

  • Pay the balance off every month. I only use a credit card for things that are already in my budget. I keep a rainy-day fund so I don't need to put emergency expenses on credit. Paying credit-card interest is a very expensive way to borrow money, and it is best to avoid it.
  • Check the outstanding credit-card balance several days before every due date. If there are any surprises, there's still a chance to curb spending before the statement is issued. This is especially helpful in my case, since there are two cardholders using the account, and we sometimes get out of sync with the budget.
  • I also put the payment due date on my calendar with a recurring reminder several days in advance. Missing the payment date by even one day means paying interest on your outstanding balance. Ouch. My ring-tone reminder is a bugle!
  • Save for big purchases. I will put a large purchase on my card only after I've already put the money aside. Then, I pay it off in full before the due date.

Finding a card that will work for you takes some shopping around. The combinations of annual fees, interest rates, and rewards available can be dizzying — as can be the fine print in the terms and conditions. Focus on getting rewards you can actually use, staying on budget and keeping an eye on your payment due date, and a credit card really can be a power tool. 

Share now

Learn about Tangerine’s options for spending that put you in charge.

Spend and save at the same time with the Tangerine Money-Back Credit Card.

Related posts

Money Mistakes I've Made While Being at Home
Money Mistakes I've Made While Being at Home
February 9th, 2021 | Maria Hyde
What Happens If You Miss A Credit Card Payment?
What Happens If You Miss A Credit Card Payment?
January 21st, 2021 | Kelley Keehn
Managing Finances After a Recent Separation
Managing Finances After a Recent Separation
December 3rd, 2020 | Dominique Jarry Shore
Legal Stuff
This article or video (the “Content”), as applicable, is provided by independent third parties that are not affiliated with Tangerine Bank or any of its affiliates. Tangerine Bank and its affiliates neither endorse or approve nor are liable for any third party Content, or investment or financial loss arising from any use of such Content.
The Content is provided for general information and educational purposes only, is not intended to be relied upon as, or provide, personal financial, tax or investment advice and does not take into account the specific objectives, personal, financial, legal or tax situation, or particular circumstances and needs of any specific person. No information contained in the Content constitutes, or should be construed as, a recommendation, offer or solicitation by Tangerine to buy, hold or sell any security, financial product or instrument discussed therein or to follow any particular investment or financial strategy. In making your financial and investment decisions, you will consult with and rely upon your own advisors and will seek your own professional advice regarding the appropriateness of implementing strategies before taking action. Any information, data, opinions, views, advice, recommendations or other content provided by any third party are solely those of such third party and not of Tangerine Bank or its affiliates, and Tangerine Bank and its affiliates accept no liability in respect thereof and do not guarantee the accuracy or reliability of any information in the third party Content. Any information contained in the Content, including information related to interest rates, market conditions, tax rules, and other investment factors, is subject to change without notice, and neither Tangerine Bank nor its affiliates are responsible for updating this information.
Tangerine Investment Funds are managed by Tangerine Investment Management Inc. and are only available by opening an Investment Fund Account with Tangerine Investment Funds Limited. These firms are wholly owned subsidiaries of Tangerine Bank. Commissions, trailing commissions, management fees and expenses all may be associated with mutual fund investments. Please read the prospectus before investing. Mutual funds are not guaranteed, their values change frequently and past performance may not be repeated.