Getting a credit card can help you improve your credit history if you use it the right way by employing the right tactics. Read on to know how you can use your credit card responsibly to increase your creditworthiness over time.

Strategies for young adults to use their credit card responsibly:

Here are eight strategies that you can adopt to use your credit card to improve your creditworthiness:

  • Improve your understanding of credit by educating yourself: Oftentimes, young adults take credit cards without understanding the concept of credit and creditworthiness. You must familiarise yourself with key credit card-related terms like credit score, credit report, billing cycle, and credit utilisation before taking a credit card. Understanding the functioning of credit cards can help you use your credit card in a way that helps you build a good credit history.
  • Choose an online savings account that offers efficient mobile banking services: If you don’t already have a savings account, you must open one with a bank that focuses on efficient mobile banking services. Today, customers can conveniently access and manage their credit cards through several mobile banking apps.
  • Get a credit card that offers you most benefits: You must choose rewarding credit cards that offer welcome bonuses, cashback, or points on purchasing goods and services using the card. You can collect these points and use them for your expenses in the future while continuously growing your savings. Lifetime-free credit cards charge no annual fee from the customer, thereby helping them increase their annual savings.
  • Know your credit limit and read all credit reports: The credit card company generates a credit report at the end of every billing cycle that contains all the details of your credit history. You can track your spending, detect errors or unauthorised changes, and avoid exceeding your credit limit by checking your credit reports regularly.
  • Time your purchases to benefit from an extended interest-free period: You can time your purchases to extend your interest-free period by purchasing goods or services at the appropriate time. For example, you can make a purchase after the bill generation – if your card has a monthly billing cycle – to benefit from a 45-day-long interest-free period. Additionally, utilizing a credit card EMI calculator can help you plan and manage your repayments effectively for larger purchases.
  • Read the terms and conditions document carefully: The terms and conditions document contain all the essential information about the credit card including its billing cycle details, fees, etc. You must read this document carefully to use your card responsibly.
  • Don’t exhaust your credit limit: A very important point to be kept in mind is spending within your credit limit. You can check your credit limit in the monthly credit report. You can incur over-limit fees if your spending exceeds your credit limit. Furthermore, doing so can negatively impact your credit score.

Several banks host credit card EMI calculators on their websites that help customers like you plan credit card EMIs (equated monthly instalments) before choosing a credit card. Planning your credit card’s repayment before opting for it can help you significantly improve your creditworthiness.

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Antonio Peters
Student. Typical social media nerd. Analyst. Zombie guru. Gamer. Award-winning thinker. Set new standards for analyzing wooden horses with no outside help. What gets me going now is promoting xylophones in the government sector. Uniquely-equipped for working on ice cream in the aftermarket. Spent 2001-2008 creating marketing channels for trumpets with no outside help. Had some great experience testing the market for puppets in Deltona, FL. Spent 2001-2007 importing psoriasis in the aftermarket.