A Beginner’s Guide to Managing Credit Cards Like the Pros
Credit cards can be an amazing financial tool, and with the right strategies, you can use credit cards to take your personal finances to the next level.
Author: Abby Butkus
March 21, 2023|Blog
Educating yourself about credit cards including how they work, what benefits come along with them, and the best ways to manage them is key to using credit cards wisely and taking advantage of all they have to offer.
So why is credit card management important? The risk is that with the wrong strategies, you can hurt your personal finances for years to come.
So, where do you start? First thing’s first. Find a credit card that’s easy to use, doesn’t come with a lot of confusing terms and restrictions, and was developed with first time credit cardholders in mind, like Arro Card.
Creating a Credit Card Management Plan
In order to use credit cards effectively, you really need to create a solid credit card management plan and one that you can actually stick with every month. Having a credit card management plan simply means that you keep track of all your credit cards including their balances, due dates, credit limits, interest rates, payoff schedules, and rewards. And there isn’t one right or wrong way to do so.
In fact, there are several strategies you can use to stay on top of your credit card purchases and payments every month:
Firstly, you could use a spreadsheet to organize all of your data. With each card listed on the left-hand side of the spreadsheet, you can then input all of the information you’d like to track in the corresponding cells on the right. The best part of using spreadsheets is that they’re easy to create and update as needed. Plus, you can input a combination of numerical figures and text, so that everything you need to know about each card is located in one convenient place.
Second, you can always choose to manage your credit cards through their app. Many credit cards these days come with an app tailor-made to help you manage your spending all in one place. Arro Card’s app, in particular, allows you to set up alerts when your payment is coming due and receive important notifications that help you build good credit habits.
Third, you can take advantage of digital tools that make credit card management more of an automated process. By linking accounts, you can set up automatic payments for each of your cards, so that you never miss a payment or incur a late fee again.
Lastly, you can use the calendar app on your cell phone to keep yourself organized as well. For example, you can set reminders each month to complete certain financial tasks like checking your statement or paying your bills on time. You can also set a yearly reminder to check your credit report or check your credit cards for new features and perks.
Remember, you don’t have to settle for just one of these credit card management strategies. Feel free to use as many of them in combination as you can so that you can use your credit cards in the most efficient way possible and stay on top of all your payments.
Personal finance is personal, and so is credit card management. What works for one person may not work for another. So, take your time to decide which credit card management system is right for you. The most important thing is that you stick to your management plan.
Why is Credit Card Management Important?
Solid credit card management reduces your chances of falling for the many credit card pitfalls out there, which ultimately prevent you from getting loans you need at good rates in the longer-term, think: house, car, education, etc.
When you add new tasks into your monthly personal finance routine—as part of your overall credit card management system—these tasks become natural over time, so you won’t have to keep reminding yourself to do them every single month. The strategies we recommend can end up saving you a lot of time because you’ll no longer have to check balances, ask yourself when your next due date is, or pick up extra hours to pay off the late fees and interest payments you accidentally incurred.
And when your partner, family members, and friends see how financially savvy you are, they might be inspired to do the same. Win-win!
10 Tips for a Successful Credit Card Management Strategy
Here are our favorite tips for credit card holders who are serious about using personal lines of credit to get ahead instead of falling behind:
1. Educate Yourself
One of the biggest challenges people face is that they don’t know enough about credit cards before they start using them, and that leads to a lot of trouble. Familiarize yourself with credit card-related terms like APR, credit limits, billing cycles, grace periods, and statement dates.
2. Run Your Credit Report
Checking your credit report at least once a year is critical to success. Not only does it allow you to track your credit score, but it also helps you discover any mistakes that companies have reported against you, and it reminds you of credit cards in your name that you may have forgotten about. Credit score not that high yet? Don’t worry! The Arro Card does not require a credit history, so it’s the perfect option to get anyone started on their credit-building journey.
3. Research Your Options
No two credit cards are exactly the same. Before choosing one, always do your research. Ask yourself questions like what is the APR for this card, is there a minimum credit score to get approved, and do they charge an annual fee?
4. Compare and Contrast Your Options
As you complete your research, you may come across several credit cards that seem like a good fit for you. To help you decide which card to apply for, do some simple comparisons. Knowing your typical spending habits and the lifestyle that you lead will help you find options that are right for you. If you’re opening a credit card for the very first time, choose a card specifically designed to help new users build good credit like Arro.
5. Select a Credit Card With an App
Opening a credit card with an easy-to-use app allows you to set up notifications and receive alerts so that you can stay on top of your balance and payment due dates without a lot of effort.
6. Always Pay on Time
Timely credit card payments are where it’s at. Knowing your due date is one of the most important aspects of being a credit card holder as it helps you to avoid late fees and interest payments. Even one day outside of your grace period can cost you, so be on time, every time.
7. Pay in Full (as often as possible)
Whenever possible, only buy what you can easily pay off at the end of the month. Paying your balance in full is the quickest way to build good credit. And it saves you so much money in the long run.
8. Do the Math
Sometimes not paying off your balance at the end of each month is a smart decision. For example, you could make a purchase that comes with 24 months of no interest and make sure the balance is paid off on time. Or, you use a credit card to buy new furniture because the interest rate is lower than a loan. If you can’t decide, do the math and see if it actually saves you money or not.
9. Take Advantage of Benefits
Many credit cards come with benefits you may not have thought of. From a free FICO score tracker to instant access to credit limit increases, Arro Card allows you to tap into some pretty nice benefits.
10. Don’t Get Carried Away
It may be tempting to open up a credit card every time you’re offered a free t-shirt or discount at your favorite store, but don’t do it! Having a credit card is a huge responsibility, and having too many of them can seriously hurt your credit score.
By keeping these 10 tips in mind, you’re ready to use credit cards to your advantage!
1. Which is the best method to manage your credit cards?
The best method to manage your credit cards is the one that works well for you. Choosing the right credit card management strategy may come with a little trial and error at first, but eventually, you’ll see which strategy or strategies makes the most sense to you and are easiest for you to maintain month to month.
2. How do I manage all of my credit cards?
The way to manage all of your credit cards at once is to automate the process of tracking all of your cards in one location, make all payments on time, pay off the balance in full each month whenever possible, and refrain from keeping too many cards open at one time.
3. What are important factors in managing your credit cards?
The most important factors when it comes to managing your credit cards are knowing how many credit cards you currently have, the balances on each card, your credit limits, due dates, interest rates, payoff schedules, and rewards. It’s also important to check your credit score at least once per year.
4. How do I manage too many credit cards?
If you feel like you have too many credit cards to manage, you probably just have too many credit cards in general. The best next step would be to pay off the balance on one or more cards and close the accounts over several months so it doesn’t negatively impact your credit score.
Arro is on a mission to provide fair access to credit for all consumers as well as the financial literacy to make sure you’re using your Arro Card to benefit YOU. Interested in learning more? Follow Arro on Instagram to stay up to date on the latest tips and trends.