As I grew up, I always heard bad stories of credit cards. My parents always were against me getting one and if we’re being honest, even getting a debit card was a battle. After not really thinking about it for years, it wasn’t until I was 23 when I thought, hey, I should get a credit card. Now maybe not having one for so long instilled good spending habits, but nonetheless, I wish I had gotten one much sooner. I’ve racked up a decent amount of rewards and have helped my credit score quite a bit. Using a credit card instead of cash can lead to over-use and excess spending leaving you with a credit card bill that seems impossible to pay off. However, if you use your card wisely, the benefits of credit card use can actually improve your bottom line.

Most credit cards now offer an array of benefits. Matching these benefits to your own purchasing preferences will help you to improve your finances. I generally use three types of cards. The first is a credit card tied directly to my checking account. My credit union pays me 3% interest on balances up to $20,000 if I use my card at least 12 times each month. I do not know about you, but I do not know of anyone else that pays 3% for FDIC insured balances today. Aside from this already great deal, the card itself also has typical 1-3% cash back on purchases depending on the category. I typically use this card to pay most things each month.

My second card that I use offers 5% cash back on different categories throughout the year. I tend to use this instead of my other card for these specific purchases when it applies. The other card that I have, funny enough, is an Amazon card. Never thought I would say that, but they have no fees and give 5% cash back on Amazon purchases so I figured why not. It’s really the only place I use it for, but I ought to make the most out of my spending right?

I do not have one, but a typical credit card that is good to have is one that offers travel rewards. There are quite a few out there that offer rewards related to hotels, flying, cash back on travel purchases and more. If you travel often, whether it be for work or fun, having a card that focuses on travel rewards should be a priority.

It is important to keep track of your spending. Check your transactions regularly and make sure that you are not spending more than you can afford to pay each month. If you pay with cash, you are more aware when your cash supply gets low. The same thing applies to your credit card; check those transactions and balances throughout the month to make sure that you are not overspending. If you find that you are only able to make partial monthly payments and that your balance is rolling over, this is a sign that you need to reevaluate your spending. My rule is to treat credit cards like debit cards. If I am not comfortable with whatever money I’m spending being taken out immediately, I do not make the purchase. Typical interest rates on card balances range from 14% to 25% and over, with late payment fees of up to $40. It is important not to finance your cash flow shortages with credit card debt. This is one of the most expensive options for financing.

Do not be afraid to use your credit cards for your monthly payments and purchases. Just be sure to keep track of your usage and do not increase your spending because you still have available credit on the cards. Maintain discipline and stay within your cash flow means, be sure to check all your monthly transactions, and promptly report any unauthorized transactions. If you have any questions, your financial advisor can help you find a card that is right for you.