Credit cards offer convenience, security, rewards and the opportunity to build a healthy credit history. But exercise caution: When not used responsibly, debt can spiral out of control. Learning how to use a credit card so that it works for you—rather than letting it take control of your life—is simple in theory but requires discipline in practice.
Find The Best Credit Cards For 2025
No single credit card is the best option for every family, every purchase or every budget. We've picked the best credit cards in a way designed to be the most helpful to the widest variety of readers.
Why You Should Use a Credit Card
Credit cards come with incredible advantages. Even one of these would be reason enough to consider a credit card, but collectively, they offer a package that’s hard to ignore.
Paying by card:
- Offers convenience. Credit cards are accepted nearly everywhere and make paying for things exceptionally easy. And, unlike debit cards, you only need to make one payment per month to cover an entire billing cycle’s worth of transactions.
- Includes protections. Credit cards offer fraud protection, chargeback rights and extended warranties that debit cards don’t. This makes paying by credit card the safest way to make most purchases.
- Makes budgeting easier. Credit cards can help you track expenses and see your total monthly spending at a glance. Most cards can also be linked with spending trackers or apps, if you wish.
- Helps you build credit. Every month of responsible behavior can improve your credit score, helping you qualify for other forms of financing at lower interest rates in the future.
- Provides earning opportunities. Many credit cards earn rewards like miles, points and cash back and may offer lucrative welcome bonuses, too. This is an easy way to rebate every purchase you make.
How To Use a Credit Card Responsibly
The perks of paying by credit card make it a double-edged sword. It’s easy to get carried away paying for things with a credit card, but a few basic rules will help you stay on track. Among these are two key pieces of wisdom: Don’t spend more than you can afford, and pay off your balance on time, every month.
Pick a Card That Works for You
The easiest way to choose a credit card is to pick anything offered by your primary bank, but that’s rarely going to help you zero into the best option. Instead, you should consider your personal finance situation to determine which card features you need, what you may qualify for and which rewards are the best for you.
Not sure where to start?
Forbes Advisor provides an array of recommendations to help you cut through the plastic jungle, including:
Narrowing down your options should include looking into annual fees and other costs you might incur, understanding the card’s APR and considering how the card rewards program works. Use a card comparison tool if you need help comparing offers.
Spend Only What You Can Afford
Credit cards may feel like an endless supply of borrowed money, but that’s far from reality. Your credit limit is the maximum amount you can charge to a card, but you may want to cut yourself off before getting close to that limit. You must pay back everything you spend or be prepared to be hit by financial penalties. Consequences of overspending can include steep interest charges, late fees and penalty APRs.
Paying interest on a credit card balance is something to pay close attention to. If you charge $1,000 on a credit card with a 20% APR but only make minimum payments, it will take you nearly 10 years to pay off that debt and cost over $2,050 when you factor in the original balance plus interest charges—and that assumes you don’t make any other charges in the meantime. In other words, you’ll pay dearly for the privilege of paying over time.
Spending more than you can afford and maxing out credit cards can also lead to high credit utilization, which is another dangerous game with your credit. Your credit utilization rate is the amount of credit used compared to the total amount available. For example, if your card limit is $10,000 and you owe a total of $2,000, you’re using 20% of your available credit. To maintain a healthy credit score, we recommend keeping your credit utilization rate under 30%. This signals to financers that you aren’t overextended.
Make Payments on Time
Another essential rule of owning a credit card is paying bills on time. If you miss a payment, or even pay a few days late, your credit card issuer can assess late fees or raise your interest rate for future purchases. Late payments also get marked on your credit report and impact your credit score. Your payment history accounts for 35% of your credit score, making this an especially important factor in maintaining good credit.
Additionally, late payments can be a slippery slope. One missed payment might mark the start of a spiral—you’re hit with late fees, making your balance even higher and harder to pay off. Interest rates rise and so does your total debt. Meanwhile, your credit score could fall, which means you could face higher APRs on mortgages, car loans or other common forms of financing.
Most credit cards give cardholders a grace period of at least 21 days after your statement closes to pay off a balance without being charged interest, though you’ll want to double check your card terms and conditions to confirm payment due dates. To ensure you don’t miss a payment, mark your calendar, put a reminder in your phone or set up autopay. Although paying the full amount by the due date is best, even making a minimum payment can keep an account in good standing and avoid costly late fees.
How To Use a Credit Card To Increase Credit Score
We’ve touched on credit scores already, but educating yourself on some of the finer details can help you build your credit score from scratch or rebuild it from a low score.
Lenders use credit scores to determine whether applicants are risky borrowers. Three major credit bureaus (Experian, Equifax and TransUnion) use slightly different FICO scoring models to measure your score, but the basic premise is the same for all three. The higher the credit score, the more likely lenders will consider you a responsible borrower who makes payments on time, pays off balances and has a healthy mix of credit. Generally speaking, FICO Scores range from 300 to 850—from poor on the low end to exceptional at the high end.
As mentioned, payment history and credit utilization make up a big part of your credit score. Other factors include the length of your credit history, number of new credit card or loan applications and the mix of credit types on your account (like student loans and mortgages).
Besides paying your bills on time and in full, let’s look at the other ways to increase your credit score.
Keep Your Oldest Account Open
Showing a long history establishes your track record of being a responsible borrower, and one way to do this is by keeping your oldest credit card account open. Then, when other potential lenders pull your credit report, they’ll see you were a customer for a number of years rather than someone with only brand new accounts. As your accounts age, your credit score typically rises (all else equal).
Obviously, your financial needs may change over time, so it might seem unnecessary to keep a card open if it no longer works for you. But that might not be your only option. Many issuers allow a product change to another card from the same issuer instead of canceling it entirely. That way, you keep the account history and lengthen your card history, while still considering a card more in tune with your current needs and preferences.
For example, many student cards can be converted to regular credit cards after you graduate. Other common product changes include changing secured cards to unsecured cards where a deposit is no longer required. In some cases, you may also be able to upgrade a rewards card to one with more benefits (or downgrade to one with a lower annual fee).
Don’t Apply for Too Many Cards
There’s no official guidance for the right number of cards to have. Instead, you’ll want to consider your own needs. Having multiple cards can help you organize finances, earn stronger rewards, obtain higher credit limits or enjoy multiple benefits. But too many cards can also be a detriment: There are more payments to track, numerous terms and conditions to understand and more temptation to overspend.
There is, however, a clear-cut rule for how many cards to apply for at a single point in time. While it may seem counterintuitive, you don’t want to apply for a stack of credit cards to see which one you’re approved for. Each application generally results in a hard credit check during the application process, each one lowering your score by a little. Multiple applications in a short period can mean multiple score reductions all at once, leading to a significant overall effect.
The best practice is to research which cards are likely available to you and simultaneously match your preferences. When available, use preapproval or prequalification tools to estimate the odds that your application will be fully approved. Preapproval tools typically have no impact on a credit score, making them a smart starting point. Though your approval won’t be guaranteed until you formally apply, it can help you avoid dinging your score unnecessarily.
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Consider a Secured Card
Having no credit history, or poor credit, can be a stumbling block, but it isn’t an automatic disqualification from obtaining a credit card. Secured credit cards can be a fantastic workaround as you establish or rebuild your credit.
Secured cards require a security deposit (as low as $200) that act as the card’s credit limit until you’ve proved your creditworthiness. When you provide a deposit, the risk you pose as a customer goes down, so issuers are more likely to approve you for the credit card. Some secured cards have no annual fees and even cash-back potential. Most importantly, they’ll report credit activity to all three major credit bureaus so you can improve your credit score.
With responsible use, the best secured credit cards may upgrade a secured account to an unsecured, traditional credit card and return the cardholder’s deposit after several months or a year of responsible use. Therefore, the inconvenience of providing a deposit can be short-lived and a strategic stepping stone on your credit journey.
Don’t Carry a Balance
Although we’ve already mentioned this, it merits mentioning again: The best way to build your credit score with a credit card is to ensure you’re paying your bill in full each month and on time.
There’s a long-lived myth that carrying a small balance can raise your credit score, but there’s no truth to that, according to the Consumer Financial Protection Bureau. Carrying a balance will not improve your credit score. Instead, pay off the total amount due. This will help you avoid interest while also improving your debt-to-income ratio and credit utilization rate.
How To Use a Credit Card To Earn Rewards
Assuming you’re paying your credit card bill to avoid interest and fees, rewards credit cards can be a valuable way to gain a return from purchases you were going to make anyway.
Customers have options to earn cash back, branded points or miles or flexible bank points. Each one has its advantages, and the best choice coincides with the type of rewards you prefer—some people love travel rewards or shopping credits while others prefer the flexibility of cash back. Considering your redemption options is definitely important, but so is looking into how you earn the rewards in the first place.
Earning Credit Card Rewards
Not all credit cards earn rewards in the same way, and that’s a good thing. Some cards earn at a flat rate (like 2% cash back on every purchase), while others offer tiered earnings (like 5% back on groceries but only 1% on everything else). Because of this, you’ll want to consider your spending habits before choosing a card and compare the rewards potential of different structures.
If your credit card transactions tend to be clustered with a specific retailer or type of purchase, it can make sense to choose a card that features higher returns on those types of transactions. On the other hand, customers who have an assortment of purchase types may prefer a card with a flat rate. Eventually, you may actually prefer to juggle multiple cards, like one credit card for strong rewards on groceries, one for travel and one for everything else.
Redeeming Credit Card Rewards
After you’ve earned your rewards, spending them is the fun part. Make sure you’ve chosen a form of reward that aligns with your goals and preferences: There’s no right or wrong answer, but there may be one more customized to you.
| Type of Rewards Credit Card | Advantages | Disadvantages |
|---|---|---|
| Cash Back | Easy to understand Easy to redeem for anything Option to use them to reduce your card balance | Fixed value that will never rise |
| Branded Rewards (like Delta SkyMiles, Hilton Honors points or Kohl’s Cash) | Points may accumulate more quickly May provide access to other benefits and discounts Possibility to obtain more value than cash back | More limited to specific reward redemptions Value of your rewards is more variable Risks of program changes and devaluations |
| Flexible Rewards (like Chase Ultimate Rewards®) | Many types of redemptions to choose from Potential to obtain more value than cash back Mitigates risks of devaluations | Difficult to understand the best uses of points Cash back rewards can be poor value |
Find The Best Cash Back Credit Cards Of 2025
Bottom Line
Credit cards have the potential to be either a powerful tool or a challenging liability, depending on how you use them. That makes it essential to understand what you’re getting into beforehand and to be willing to put the effort into learning how to use a credit card responsibly. With discipline and attention, you can make cards work for you, leading to ample rewards, strong credit scores and all the conveniences and protections that credit cards provide.
