I talk to consumers on a daily basis about credit card debt. Some people see credit cards as a necessary evil although I know a number of people that are able to live without one. You can actually use a debit card for most things requiring a credit card. Yes, if you rent a car they will tie up money in your checking account until the car is returned. But it is possible to live without it. I don’t normally advocate getting credit cards, but do recognize there are situations where it makes sense. Perhaps you are a young adult trying to establish your credit score. Maybe you use credit cards to earn rewards, such as free flights or cash back on your purchases. I also recognize that there are many people out there that just feel they need a credit card and will inevitably carry a balance on that card. If you fit any of these categories, check out this article for the best credit cards for your situation.
Best credit cards to have
Using credit cards responsibly is encouraged. If you can avoid carrying a balance, do so. But if you must, find a card with a low APR or one with promotional financing offer. I take no issue with using credit cards to build up rewards. It’s a great way to rack up miles for free or discounted travel. My recommendation would be to use your credit card for everyday purchases that you would normally pay by cash. But make it a habit of making a payment on the account soon after charging.
The best strategy for this would be to pay the entire balance due before a statement is even generated (as opposed to the due date listed on your statement). By paying before an actual statement generates, your balance reported to the credit bureaus will be $0.00. If you wait to pay on the due date, your creditor is reporting a balance due on your account. Utilization of your available credit is a factor in computing your FICO score. The lower the utilization, the better your score. By paying the balance due before a statement generates and reports to the bureau, you are shown as utilizing less of your available credit.