4 Practices To Use Your Credit Card Smartly & Avoid Debt

Credit cards are known for their convenience, allowing one to accumulate reward points for merchandise or trips, and even prevents service changes from appearing in your bank account as you do not withdraw or debit cash as frequently.

Each time you use your credit card, you are still spending money. Hence, it’s important to use a credit card wisely and manage your expenses responsibly. Credit cards work differently as you are making purchases on credit – you are 100% liable for repaying everything you’ve bought on your credit card.

So, to use your credit card sensibly – it is vital to bear a few key principles in mind; read on for the five practices to apply.

Make monthly payments on time

Besides paying the owed amount in full, you should also pay it on time. As such, only make purchases that you are able to pay off monthly – it will help you avoid debt and save money at the same time.

By following this simple practice, you can avoid accumulating interest charges, late fees, and poor credit scores. As such, you should repay your credit card bill as soon as you have made a purchase. This will help you to build towards a high credit score and instil the habit of  repaying your bill long before its due date.

Otherwise, if you have any urgent payments to make – applying for an instant cash loan can help to repay the owed amount.

Spend within your means

You should adjust your spending habits and ensure you do not overspend. Try to decide how much you are going to spend and stick to that amount. Also, take this as an opportunity to build credit and make larger purchases in small increments.

This means you should make purchases that you are able to pay off to avoid accumulating credit card debt. You can do this by marking items on a list that are absolutely necessary, and prioritising your needs versus wants to ensure you have the ability to spend.

Maintain a low utilisation ratio

In definition, utilisation ratio is the percentage of credit that’s currently being used. If you use up a high percentage of your available credit, it can be harder to repay debt and may even lower your credit score in the long run.

Moreover, you will be paying more interest over time. Hence, for the most part, ensure your utilisation ratio is below 30 percent of your available credit. Try not to look at your credit card as an extension of your budget; spending ahead is bad practice, and you may have difficulties covering the amount in the future.

Instead, you could consider approaching a legal money lender in Singapore for a loan, depending on your needs. When you are able to clear both the credit debt and loan later on, it will essentially boost your credit score as well.

Be aware of the credit card terms

As credit cards come with different interest rates and potential fees, you should aim to fully understand the exact terms of your credit card agreement. By doing so, you can help keep track of your payments and avoid any unexpected charges.

Go through the agreement meticulously to know when will a fee arise, how interest may be applied to your card, and when the interest will increase. So, be extra careful and thorough as you are making your credit card selection; it should match your financial goals and spending habits.


When you are able to apply these practices routinely, you will not accumulate any outstanding payments and maintain a good credit score.