Credit cards are powerful tools that can be used as a financial aid that can help you build a strong credit profile, or abused to spiral the holder into high-interest debt problems.
Knowing how to use them wisely can save you money, boost your financial health, and make the banks work for you, instead of the other way around.
1. Pay Your Balance in Full
Always aim to pay your full statement balance by the due date. This helps you avoid interest charges and build a solid payment history.
2. Never Miss a Payment
Set up automatic payments or reminders to avoid late fees and damage to your credit score. Even one missed payment can cause a dip in your credit.
3. Keep Your Credit Utilization Low
Try to use less than 30% of your available credit — ideally under 10%. Low utilization shows lenders you’re not over-relying on credit.
4. Review Statements for Errors
Check your monthly statement for any unusual or unauthorized charges. Reporting fraud early helps protect you and may limit your liability.
5. Use Rewards Strategically
If your card offers points, cash back, or perks, use them — but don’t overspend just to earn rewards.
6. Limit the Number of Cards You Open
Too many credit cards at once can hurt your credit score temporarily and make debt harder to manage.
7. Keep Old Accounts Open
The length of your credit history matters. If there’s no fee, consider keeping older cards open even if you rarely use them.
8. Know Your Interest Rates
Understand the APR (Annual Percentage Rate) on your card, especially if you’re carrying a balance or using a balance transfer.
Q: Should I close a credit card I don’t use?
A: Not always. If there’s no annual fee, keeping it open can help your credit history and utilization rate.
Q: How many credit cards is too many?
A: It depends on how well you manage them — for most people, 1 to 3 is manageable.
Q: Can I use my card for small purchases?
A: Yes! Frequent, small, manageable charges (that you pay off) are a great way to build credit.
Credit card interest is the cost of borrowing money when you don’t pay off your full balance by the due date. It’s typically expressed as an Annual Percentage Rate (APR) and can vary by card type, issuer, or transaction.
Learn MoreA minimum payment is the smallest amount you must pay on your credit card by the due date to keep your account in good standing. It prevents late fees and credit damage, but leaves interest charges on the rest of your balance.
Learn MoreA credit card is a financial tool that lets you borrow money from a lender (usually a bank) to make purchases up to a set limit, with interest charged if you don’t pay in full by the due date.
Learn MoreCredit utilization is the percentage of your available credit that you're currently using. It’s a key factor in your credit score, and one of the easiest things you can improve quickly in order to increase your credit score.
Learn MoreA credit score is a three-digit number that represents your creditworthiness, or how likely you are to repay borrowed money. In Canada, credit scores typically range from 300 to 900. The higher your score, the better your credit profile looks to lenders.
Learn More
