Skip to main content Skip to footer
Back to all articles

When is it Time to Use a Credit Card?

Is a credit card right for you? TDECU describes the benefits, from earning rewards to building credit. Apply today to start enjoying the perks!

When is it Time to Use a Credit Card?

Credit cards offer many benefits. But how do they work? Essentially they allow you to borrow money from a lending institution, such as a credit union and then use that money to make purchases. Then, the lending institution will send you a bill for the amount you borrowed, plus interest and fees.

The interest rate on credit cards is usually much higher than on other types of loans, such as car loans or mortgages. This is why it is important to use a credit card responsibly and only borrow as much as you can afford to pay back each month. If you carry a balance on your credit card from month to month, the interest charges can quickly add up and cost you a lot of money.

However, if used responsibly, credit cards offer many advantages. They allow you to build your credit history and earn rewards for things like cash back or travel miles. And if you use your card correctly, it can be a great financial tool.

When is it Ideal to Use a Credit Card

Credit cards are different from debit cards because they allow you to borrow money that you pay back with interest. This can be beneficial in some situations, like when you need to make a large purchase and do not have cash on hand.

Credit cards can also help you build up your credit history and score. A good credit score is important for things like getting approved for a mortgage or a car loan, renting an apartment, and even landing a good job. Your credit score is a three-digit number lenders use to evaluate your creditworthiness. The higher the score the more likely you are to be approved for a loan or credit card and qualify for lower interest rates.

Your lender will give you a spending limit. Your credit limit is the maximum amount of money you can borrow from a credit card company. Your credit limit is determined by your creditworthiness, which is based on things like your income, employment history, and other factors. As your good credit builds, so will your limit. 

Credit Card Payments

Paying your credit card balance on time and in full each month is important to avoid interest charges and late fees. It is also important to remember that carrying a balance on your credit card will likely result in high-interest charges, so it is important to pay off your balance as quickly as possible.

The Importance of a Good Credit Score

A good credit score is important for things like getting approved for a mortgage or a car loan, renting an apartment, and landing a good job. Avoiding late payments and paying down your balance each month is key to building a good credit score with your credit card and will positively impact your credit report. Keep in mind that carrying a balance on your card can be costly, so it is best to pay off any outstanding balances as quickly as possible. If you want to improve your credit score, focusing on not overspending with your card and paying your balance off in full each month is a good place to start.

Credit History

Your credit history is an important part of your overall financial health. A good credit score can help you get access to loans, secure your dream home, and employment opportunities, and even save money on things like car insurance. By using a credit card responsibly, you can build up your credit history and improve your overall financial situation.

Credit card statements are reported to the credit bureaus, so it is important to be sure you always make your payments on time. You can also request a credit limit increase if you have a good history of making payments on time and keeping your balance low.

Balance Transfer Cards

If you have a high-interest rate on another credit card, it might be worth considering a balance transfer card. These cards allow you to move your existing debt onto a new card with a lower interest rate, which can help save you money and make it easier to pay off your debt over time. Just remember most balance transfer cards also charge a transfer fee, so it is important to consider all of your options before making any decisions.

Credit Card Fraud

Credit card fraud and identity theft are serious issues that can have devastating consequences for your credit score and financial situation. To protect yourself from these types of scams, it is important to monitor your credit card statements regularly for any unauthorized charges or suspicious activity.

The Perks of a Credit Card

In addition to building your credit history and improving your credit score, using a credit card can also help you save money. Many cards offer cash back or other rewards for using your card, and some even offer discounts on things like travel, entertainment, and restaurants.

Reward Credit Cards

Another great benefit of using a credit card is you can often earn rewards like cash back or points that can be redeemed for travel or other purchases. Credit card companies offer these programs as an incentive for people to use their cards, and they can be a great way to save money on the things you buy every day. There are a wide variety of reward credit cards available today, so it’s important to do your research before choosing the right one for you.

Fraud Protection

One major advantage of using a credit card is your transactions will be protected in the event of any unauthorized charges or identity theft. Most credit cards offer fraud protection services, which can help you stay on top of any suspicious activity and give you peace of mind that your funds are safe.

Using Credit Cards Responsibly

As we have shared, there are many positive reasons to use credit cards, such as building your credit history, earning rewards and discounts on purchases, and saving money on interest charges. It is important to be responsible with your credit card use, by making payments in full and on time each month, and by not carrying a balance on your card. Balance transfer cards can be a great way to save money on interest charges, and cash back rewards programs can help you save money on the things you buy every day.


Interested in a credit card with great benefits? Learn more, choose the best fit for you, and apply today. 

Equal Housing Lender