Using your credit card responsibly
Tips when using your credit card
When you use your credit card, you’re borrowing money that you have to pay back. A credit card doesn’t increase the amount of money you have. Your credit card spending should fit within your regular household budget.
If you don't use your credit card wisely, you may end up:
- building up debt
- paying interest
- hurting your credit score
Aim to pay off your balance every month
The money you owe on your credit card is your balance. Try to pay it off by the due date each month. If you don't pay your balance by the due date, you'll pay interest from the date you made the purchase. The interest you pay will increase the cost of everything you buy with your credit card.
Paying your balance each month shows lenders that you’re a responsible borrower. Regularly making late payments or missing payments will hurt your credit score.
Pay at least the minimum amount
If you can’t pay your balance, always aim to pay at least the minimum amount you owe.
If you don't pay at least the minimum amount, you risk:
- your interest rate increasing
- negatively affecting your credit score
- losing the benefit of any promotional rate offer you have
- your financial institution cancelling your credit card
- your card provider cancelling your credit card balance insurance
Regularly check your statement for errors
Carefully review your monthly credit card statement to make sure that there are no errors.
When you check your credit card statement online, purchases will usually appear after a few days. Keep receipts of all your credit card purchases so you can check the amounts against your statement.
If you find an error, report it right away. Contact the financial institution that issued the credit card.
Get electronic alerts from your financial institution
Your financial institution may send you an electronic alert when the credit available on your credit card falls below a certain amount.
These alerts may help you manage your day-to-day finances and avoid fees.
Keep your personal information confidential
- your card
- your personal identification number (PIN)
- your card security code, also known as the CVV number located on the back of your credit card
- your credit card password for online transactions
If you share your information, you may be held financially responsible for unauthorized transactions.
Warning signs that you're overspending
If one or more of the situations below apply to you, you may be living beyond your means:
- your credit card balance keeps growing
- you’re reaching your credit card limit
- you carry a credit card balance from month to month
- you don’t make a payment or only make the minimum payment on your credit card
- you take out cash advances with your credit card
If you often find yourself in one of these situations, do the following:
- stop using your credit card, if possible
- avoid applying for a new credit card because you've reached your credit limit on other cards
- look at your budget for ways to reduce spending
- if you have to use credit, consider other less expensive credit options
Consider other credit options
Consider other ways to borrow money if you’re having trouble paying off your credit card. Certain products may cost less in interests. These options may include:
Contact your financial institution to discuss the options that are available to you.
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