Should you use a credit card regularly?
One of the fastest, most efficient ways to build and improve your credit score is to use your first credit card(s) properly, regularly, and responsibly. That means making your payments on time and, if you can do it, in full.
Is It Better to Use a Credit Card or Debit Card? If used responsibly, it' usually better to use a credit card. You'll get security and fraud protection, you can earn rewards on your purchases, and you'll build your credit over the long run.
To keep your credit card active and prevent account closure, aim to use it at least once every month. Even a small purchase can ensure the account remains open and your credit utilization ratio stays healthy.
Using a credit card can help build good credit
If you're trying to build a credit history or improve your credit, charging even a small amount on your credit card each month can have a positive impact on your credit score, provided you make timely payments or pay off the statement balance each month.
Key takeaways. Not using a credit card regularly can cause the card to become inactive. If a credit card issuer deems your account to be inactive, it may close the account. However, closing unused credit card accounts can help protect your accounts from fraudulent charges.
- Get the Right Card. When it comes to choosing a credit card, it is essential to select one that aligns with your specific financial needs and habits. ...
- Know the Billing Cycle. ...
- Set up Limits. ...
- Smart Repayment. ...
- Timely Payments. ...
- Avoid Cash Withdrawals. ...
- Set alerts and auto-debit. ...
- Security.
- Getting into credit card debt. If you have the wrong attitude about credit cards, it could be easy to borrow more than you can afford to pay back. ...
- Missing your credit card payments. ...
- Carrying a balance and incurring heavy interest charges. ...
- Applying for too many new credit cards at once. ...
- Using too much of your credit limit.
Using more than 30% of your available credit on your cards can hurt your credit score. The lower you can get your balance relative to your limit, the better for your score. (It's best to pay it off every month if you can.)
Your credit needs may change over time. Keeping an unused card open allows you to access credit quickly without applying to get a new card. It also helps you avoid a hard inquiry, which can temporarily lower your credit score.
While you don't want to carry any balance, make sure you're still using your credit card regularly — at least on small charges. Otherwise, your credit card issuer can potentially close your account after months or years of inactivity.
What happens if I use 90% of my credit card?
Helps keep Credit UtiliSation Ratio Low: If you have one single card and use 90% of the credit limit, it will naturally bring down the credit utilization score.
Making consistent, on-time payments and keeping your credit utilization low can help you build and maintain a positive credit history. By paying off your statement each month, you may be able to avoid paying interest charges.

- Rent or Mortgage Payments. Paying your rent or mortgage with a credit card isn't always an option—landlords tend to prefer checks, cash or even Venmo payments. ...
- Utilities. ...
- Income Taxes. ...
- Medical Bills. ...
- Cash Withdrawals. ...
- Peer-to-Peer (P2P) Payments. ...
- Online Bets. ...
- Tuition.
Carrying a balance does not help your credit score, so it's always best to pay your balance in full each month. The impact of not paying in full each month depends on how large of a balance you're carrying compared to your credit limit.
There are some differences around how the various data elements on a credit report factor into the score calculations. Although credit scoring models vary, generally, credit scores from 660 to 724 are considered good; 725 to 759 are considered very good; and 760 and up are considered excellent.
In general, you should use your credit card at least once a quarter (every three months) to keep the card open and active. The answer to just how often you should use your card to maintain a good score comes down to your credit utilization and on-time balance payments, rather than how many transactions you have.
And when it comes to credit, 850 is the highest the FICO® Score☉ scale goes. For more and more U.S. consumers, practice is making perfect. According to recent Experian data, 1.54% of consumers have a "perfect" FICO® Score of 850.
If you don't use your card, your credit card issuer may lower your credit limit or close your account due to inactivity. Closing a credit card account can affect your credit scores by decreasing your available credit and increasing your credit utilization ratio.
1. Pay off your balance every month. Avoid paying interest on your credit card purchases by paying the full balance each billing cycle. Resist the temptation to spend more than you can pay for any given month, and you'll enjoy the benefits of using a credit card without interest charges.
Pay your balance every month
Credit card balances should be paid on or before the due date. Paying the balance in full has great benefits. If you wait to pay the balance or only make the minimum payment it accrues interest. If you let this continue it can potentially get out of hand and lead to debt.
What is the best way to avoid falling into debt?
- Set a monthly budget. Divide your monthly budget between three categories – necessities, wants, and pending debt.
- Pay with cash. ...
- Avoid “buy now, pay later deals” ...
- Track credit card payments. ...
- Have emergency savings. ...
- Stay up to date on loan payments. ...
- Limit amount of credit cards.
What is the average credit score? The average FICO credit score in the US is 717, according to the latest FICO data. The average VantageScore is 701 as of January 2024.
Most of your payment will go to paying interest. Since credit cards carry high interest rates, it can take a long time to pay off debt when only making the minimum payment. If you miss a credit card payment, then the bank can charge you interest on top of the original payment owed.
Consistently paying off your credit card on time every month is one step toward improving your credit scores.
- When you don't have a plan to pay the balance. ...
- When you're trying to pay off debt. ...
- When you're nearing your credit card limit.