When used correctly, credit cards can be very powerful financial tools. They offer flexibility, help you build credit, and often come with some pretty great rewards. On the other hand, when mismanaged, they can lead to high-interest debt that’s both stressful and costly. 

Knowing when and how to use credit cards to your advantage will help you enjoy the benefits while avoiding potential drawbacks. In this post, we’ll explain how to use credit cards to your advantage and cover some common questions relating to credit card use. 

How to Build Credit with a Credit Card

Any time you apply for a loan to buy a house, car, or other large purchase, your credit history plays a major role in the terms you get, including the interest rate. The better your credit, the better the loan terms and interest rate you’ll be able to qualify for. 

Good credit is built over time, and one of the biggest advantages of using a credit card is that it can help you do just that. Responsible credit card use is one of the most effective ways to improve your credit score. 

Here’s how to make it work for you:

1. Pay your bill on time and in full every month.

Payment history makes up 35% of your FICO score. Not only that, but paying late does more than just hurt your credit score. 

When you don’t pay on time, you start owing interest and often costly late fees. Paying your bill in full by the due date avoids both. To do so, never spend more than what you can afford monthly. Meanwhile, if you’re worried about forgetting to pay, you can set a reminder on your phone or set up automatic payments.

2. Start small and grow gradually. 

If you want to be extra sure you don’t overspend, try this: choose one or two payments that you make every month (such as your health insurance bill) and only use your credit card for those payments. If that goes well for a month or two, you can keep adding more types of credit card payments month by month, until you find the right balance between caution and convenience.

As a rule of thumb, using less of your available credit is better for your credit score. People with top credit scores often keep their credit utilization rate under 10%. Once you get closer to 30% or more, you’re more likely to see a noticeable drop in your score.

3. Carry cash and/or a debit card.

A 2021 study conducted by researchers at MIT found that consumers had a greater reward response in the brain, and were willing to spend more money when using a credit card. Don’t let that happen to you. If you find that certain situations, stores, or events often tempt you to spend more than you want to, consider leaving your credit card at home on those days, or at least bring another form of payment with you, like cash or a debit card.

4. Check your account activity regularly.

Logging into your account every week or so helps you track your purchases. This helps you budget for the month and potentially cut back on spending where necessary.

Read more: How to Build Credit with a Credit Card

Get Rewards and Perks You’ll Actually Use

Don’t overlook rewards and perks when considering how to use credit cards to your advantage! Rewards are one of the best advantages of using credit cards over cash. Whether it’s cash back, travel points, or gift cards, these perks can help you save money on everyday purchases. Best of all, you can earn rewards by simply purchasing things you need.

To maximize rewards:

• Choose the right card for your lifestyle. Look for a card that fits your needs and offers the terms you want. Match your rewards program to where you spend most (like gas, groceries, travel).
• Avoid cards with unnecessary fees. Also, look for a card that won’t overload you with annual or hidden fees (processing fees, annual fees, cash advance fees, balance transfer fees, etc.), which can offset your rewards.
• Redeem your points regularly. Nothing’s worse than building rewards only to have them expire. 

With a Valley Credit Union credit card, you get to choose what rewards you earn with uChoose Rewards. Options include cash back and gift cards at more than 100 retailers that cover dining, entertainment, gas, travel, and more.

Avoid Credit Card Debt

Between monthly bills, food, gas, and everyday expenses, it can be tough to stick to a budget. As of March 2025, the average household carries $10,899 in revolving credit card debt. Meanwhile, with the average U.S. credit card interest rate at 24.35%, that debt can grow fast, making it even harder to get ahead. 

To avoid getting trapped by high interest:

• Pay your balance in full each month.
• Avoid using your card for impulse purchases.
• Don’t take cash advances as they often come with extra fees and higher interest rates.

If your balance is smaller, a strict budget and consistent payments can help you pay it off faster. There are several great budgeting apps out there that can be really helpful. 

Alternatively, if you already have credit card debt, you still have options. Debt consolidation can be a great strategy for people who are facing several different types of debt. You can use our debt consolidation calculator to see how much you can save by consolidating your debt. 

Why choose a credit union credit card?

When searching for a new credit card, choosing a local credit union over a national issuer usually comes with several benefits. 

Credit unions are built to serve their members and not shareholders, which means they’re usually able to offer lower rates and fewer fees. They also offer member-focused rewards programs that are designed to save you money, and not cost you more. 

At Valley Credit Union, we’re always happy to work with our wonderful members in the Salem, OR area to help them improve their finances and reduce debt.

FAQs About How to Use Credit Cards to Your Advantage and Responsible Use

How can I build credit fast with a credit card?

Pay on time, keep credit utilization under 30%, and maintain consistent use without carrying a balance.

Is it better to pay in full or make minimum payments?

Always pay in full if you can. Minimum payments keep you in debt longer and cost more in interest. If you find yourself consistently unable to pay in full, consider lowering your credit card spending to a sustainable level. 

Can a credit card help in emergencies?

Yes, but it should be a backup plan, not your first option. Aim to keep an emergency fund in savings.

Choose a Credit Card That Helps You Save

If you’re thinking of getting a new card, consider Valley Credit Union. Our credit cards are a great, low-interest, no-hassle option for anyone in the Salem, OR area. They offer excellent security, rewards, and other perks. 

Don’t hesitate to get in touch to learn more and ask any questions you may have. 

About the Author

 Justin Roberts, Vice President of Lending

Justin Roberts is our Vice President of Lending and has been in the financial industry for over 18 years. He is an Oregon State University Graduate and has just completed Western CUNA Management School. When he is not focused on helping the members at Valley, you will find him coaching his two sons and volunteering his time to help develop the youth in our communities through sports.