Todd Christensen Profile Picture
Staff Writer at Debt Reduction Services

Wise Ways to Use Your Credit and Money

Here are 8 tips that will help you use your credit wisely. Following these principals should help increase your credit score and standing.

  1. Make all payments on time. Don’t wait until the last minute to send a payment.
  2. Pay off the entire balance every month. You’ll never be charged interest this way.
  3. Avoid credit cards that charge an annual fee and excessive penalty fees.
  4. To build credit, consider applying for credit cards from a gas station or retail store. Again, pay off the entire balance each month in full and on time.
  5. Build an emergency savings fund you can use to pay off your credit card bill in case you need to make a large purchase on credit (such as car repairs or an unexpected medical or dental expense) or you lose your income. Most financial planners suggest putting 10-15% of your income away until you have a minimum of three-months of expenses in savings, though six is not uncommon.
  6. Never make a purchase on credit you do not plan to pay off at the end of the month.
  7. Cars and trucks wear out. Plan now to buy your next vehicle by depositing $200-300 per month into a separate savings account. This will minimize (or hopefully eliminate) your need to borrow money to buy your next car. Consider buying a “recently-new” car, still under warranty, instead of a brand new vehicle.
  8. Avoid high-interest and high-fee Payday loans, Check Cashing, and Title Loan services.


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