Published: 23/11/2020

Top tips for using your credit card

Credit cards can help you manage your money and improve your credit history.

Let’s look at ways of using your card to build your credit, pay down credit, finance a purchase and maybe earn rewards. Then, some tips how to use your card and not build up needless debt or spoil your credit score. A good score will help you if you want a loan from 1Plus1 Loans.

Build your credit

If you’re new to credit or want to improve your credit history, a credit card may be a good thing for you.

Cards are granted based on your creditworthiness. Just like a loan from 1Plus1.

Your payment history is typically reported to the three major consumer credit bureaus. Making your payments on time and in full can help you establish a pattern of responsible borrowing and can help you boost your credit, whereas late payments will reduce your credit score. The three main bureaus are, Experian, Transunion and Equifax.

Earn rewards

A credit card can be an opportunity to earn rewards or cash back on purchases you’d make anyway. Rewards can be travel, hotel, airline and cash back. The best card for you depends on the type of reward you want, your lifestyle and your spending habits.

Be warned! Sometimes people who pay for their purchases with a credit card often spend more than those who pay with cash just to get rewards. If you are going to collect rewards only use your card to pay for items you’d normally buy anyway and that you know you can pay off.

Some rewards cards have a fee, so if you won’t earn enough rewards to cover the fee, opt for a different type of card.

Pay down debt

A credit card can actually help you pay off debt if you take advantage of an introductory 0% APR for balance transfer.

Lots of credit cards offer balance transfers with zero or low interest rates for a fixed or introductory period. Transferring high-interest debt and paying it off before the promotional period ends, could save you money on interest charges.

If you use a credit card to pay off other credit, don’t make any additional purchases until you pay off the balance in full as you may pay interest. Some cards charge a fee if you transfer balances, so try to find a card that offers an free intro balance transfer fee.

Finance a purchase

Usually a credit card isn’t best for financing a purchase, because of the interest rates. A card with an introductory 0% APR for purchases may give you an opportunity to make a big purchase interest-free, if you’re confident you can pay off the balance in full and before the intro rate ends.

Read the small print. Some credit cards offer deferred interest promotions. If you don’t clear your balance in full before the offer ends, you may have to pay all of the interest that accrues during the promotional period. Some may only charge interest on the remaining balance, but it could quickly add up!

Use your credit cards wisely

Credit cards give some benefits but can also lead to high interest charges, increasing what you owe and spoiling your credit score if you aren’t careful with how you use it.

Key tips

  • Make your payments on time. If you make your monthly payments late, it can negatively affect your credit scores, you will pay more interest and fees and probably be charged late fees.
  • Pay your credit card bill in full and on time each month. Save interest. If you can’t pay the full balance, pay as much as you can - at least the minimum payment on time.
  • Only buy what you can afford to pay for with cash. This will help you to not overspend and stick to your budget each month.
  • Stay well below your credit limit. Your credit utilisation ratio — the ratio between the total balance you owe and your total credit limits on all your cards — is used to calculate your credit score. Usually, a low ratio has a good impact on scores. You should try to keep your credit utilisation ratio below 30%.


There are many benefits to keeping a credit card in your wallet, but there are some risks, too. When used wisely, credit cards can help you establish your credit history, earn rewards, pay off high-interest loans or obtain interest-free financing. The best way to use these benefits and maintain your credit score is to use them to pay for items you’d buy anyway, pay your bill in full, on time every month, and keep your credit utilisation rate low.

Last updated: 29/12/2020