5 helpful credit card tips

Quick insights

• Both new and established credit card users can benefit from good credit card management.
• Asking for a credit limit increase can be beneficial even if you do not need a higher credit limit.
• Adding an authorized user can help you demonstrate responsible credit card use while helping you earn rewards.

Understanding and managing credit cards effectively can be a part of your overall financial picture. Even if you’ve used credit cards for decades, there are still ways to demonstrate your credit worthiness to current and future credit issuers.

Read on to learn some benefits of good credit card management and review a few related tips.

The importance of credit card management

Credit cards can be helpful tools for building good credit habits and establishing a positive credit history. If you’ve been successfully managing your credit cards for years, you may have reaped some of the benefits already.

Good credit habits can help lead to securing loans with favorable terms and potentially lower interest rates. You may be able to secure additional lines of credit or increases in your credit limit, even potentially at lower interest rates, when you demonstrate that you are able to:

• Maintain a low credit utilization ratio
• Pay your credit cards on time
• Pay more than your minimum payment

Credit issuers may look more favorably upon applicants who have a history of good credit card management.

5 credit card management tips

Whether you’re new to credit cards or have been using them for years, there are a few ways you may be able to make the most of your credit card. Here are some ways you may be able to flex your credit card skills.

1. Request a credit limit increase

Your credit limit is set by your credit card issuer. It is the total amount of credit available on your card, but the amount is not set in stone. You can request an increase of your credit limit.

If you’ve requested an increase, your issuer will likely want to see a history of responsible credit card use and making regular payments. Some card issuers may regularly review your account and automatically increase your credit card limit if you have a history of responsible credit card use.

2. Add an authorized user

Adding an authorized user means you are adding someone to your credit card account who can also use your card. Primary account holders who add an authorized user are responsible for any purchases made on that card—even the purchases made by the authorized user.

Accounts with authorized users may have more transactions and require additional card management and budgeting skills. In addition, many credit cards allow purchases made by authorized users to earn rewards, so the primary cardholder may be able to earn rewards faster with additional users on their account.

3.Open cards strategically

It’s not uncommon for long-term credit cardmembers to have multiple credit cards. As your financial picture changes, you may find that you could benefit from having different cards for different purposes.

You may consider opening cards that provide:

• Travel rewards and discounts
• Cash back on eligible everyday purchases
• Shopping discounts at your favorite retailers

As you add more cards to your credit portfolio, you might be thinking about closing credit cards you don't often use. This could be a good option in certain scenarios. For example, you may have gone through recent life changes.

However, you may want to think twice before closing a card. Having open lines of credit that you do not use can be helpful for your credit utilization ratio. By keeping your oldest lines of credit open, you also can show future lenders a longer age of credit, which is a factor that goes into calculating your credit score.

4. Set up automatic payments

It can be helpful to set up automatic payments to ensure you don’t miss a payment. Automatic payments can help avoid late payment fees and demonstrate good card management to your issuer. This could also safeguard cardmembers from missing payments due to circumstances beyond their control (like severe illness or hospitalization).

Many card issuers allow you to set automatic payments one of three ways:

• Minimum amount due
• Pay balance in full
• A custom amount (that must be higher than the minimum payment)

Most card issuers also allow cardmembers to change their automatic payment settings online as often as they want to. Users could initially set up an automatic payment for the minimum amount but find as their financial picture changes they would prefer to automatically pay the balance in full every month.

5. Select a card with Purchase Protections

Your credit card may have Purchase Protection benefits for added security. Purchase Protection is a benefit offered to cardmembers to protect against loss, damage or theft of eligible items purchased with your card.

The dollar amount of protection coverage and what will be protected varies depending on the card. Terms and exclusions apply, so carefully review your cardmember agreement and benefits guide to determine what purchases may be protected with your credit card.

In summary

How you use and manage your credit card is up to you. You may find that learning about different credit card management strategies can help you discover what works best for you. Adding an authorized user, requesting an increase to your credit limit and setting up automatic payments are just a few options. There are potential benefits to doing so, including credit increases, securing additional lines of credit and potentially better lending terms.