Managing Credit Cards: Banking Basics Tips

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In today’s world, a credit card can be a huge help that offers flexibility. But that is only if you learn how to use one effectively. Otherwise, this financial tool could do more harm than good. At Camino Federal Credit Union, we have been serving Montebello since 1941 with great rates, terms, and attentive member service. We are committed to your success. To learn the basics of managing credit cards, read our blog and sign up for our banking basics workshop.

Basic Tips for Managing Credit Cards

There is a saying – with great power comes great responsibility. A credit card can be a powerful financial tool, but you must manage itmanaging credit cards responsibly. From making payments to budgeting, here are tips to effectively manage your credit card:

Make Full Payments (on Time!)

One important tip for managing credit cards is to make full payments. It can be tempting to pay the minimum, but this will cost you more over time.

The minimum payment will only cover the interest charges, fees, and a small percentage of what you owe. When you only make minimum payments, you can end up owing more and accruing interest, which makes it more expensive in the long run.

Also, always make your credit card payment on time. Late payments can result in added fees, damage your credit score, and make it difficult to get other types of credit.

Monitor Your Credit Utilization Ratio

Effectively managing credit cards also requires maintaining a low credit utilization ratio. Your credit utilization ratio is the amount of available credit you use. 

This ratio could be an important factor in calculating your credit score. You should keep this ratio below 30%. For example, if your available credit limit is $2,000, keep your balance under $600. Stay within your credit limit. If you exceed this limit, you will incur a fee.

If you need an increased limit, contact your financial institution. A reputable credit union like Camino will work with you to monitor this ratio and set you up for financial success.

Budgeting and Spending Habits

When managing credit cards, also focus on budgeting and spending habits. We recommend calculating earnings, bills, and savings and setting a monthly spending limit. 

Afterward, track your expenses on your statement to ensure you stay within budget. This tactic will also help predict your payment so you do not fall behind. Set up spending alerts on your mobile banking app so you can be aware when a payment exceeds your budget. 

Also, ensure you have healthy spending habits. Placing limits on how often (and how) you use the card. Make a rule that you will only use your credit card for certain purchases, and apply a rule to never put recurring payments on the card. 

You should also work to save and create an emergency fund to cover expenses, including credit card bills.

Learn About Managing Credit Cards in Our Banking Basics Workshop

This is just scratching the surface of best practices for managing credit cards. From capitalizing on rewards and cash-back programs to using debt consolidation loans to simplify payments and put credit card debt behind you, several credit card management strategies can position you for a brighter financial future. At Camino, our passion is helping you maximize your financial health.

To learn more, visit us at, call us at 800-835-3400, or fill out a form on our contact us page. While you’re at it, sign up for our Banking Basics Virtual Workshop on Wednesday, April 26, 2023 to lay the foundation for your future financial success.