Do You Spend More With A Credit Card Bankrate Caret RightMain Menu Mortgage Mortgages Financing a home purchase Refinancing your existing loan Finding the right lender Additional Resources Elevate your Bankrate experience Get insider access to our best financial tools and content Caret RightMain Menu Bank Banking Compare Accounts Use calculators Get advice Bank reviews Elevate your Bankrate experience Get insider access to our best financial tools and content Caret RightMain Menu Credit Card Credit cards Compare by category Compare by credit needed Compare by issuer Get advice Looking for the perfect credit card? Narrow your search with CardMatch Caret RightMain Menu Loan Loans Personal Loans Student Loans Auto Loans Loan calculators Elevate your Bankrate experience Get insider access to our best financial tools and content Caret RightMain Menu Invest Investing Best of Brokerages and robo-advisors Learn the basics Additional resources Elevate your Bankrate experience Get insider access to our best financial tools and content Caret RightMain Menu Home Equity Home equity Get the best rates Lender reviews Use calculators Knowledge base Elevate your Bankrate experience Get insider access to our best financial tools and content Caret RightMain Menu Loan Home Improvement Real estate Selling a home Buying a home Finding the right agent Additional resources Elevate your Bankrate experience Get insider access to our best financial tools and content Caret RightMain Menu Insurance Insurance Car insurance Homeowners insurance Other insurance Company reviews Elevate your Bankrate experience Get insider access to our best financial tools and content Caret RightMain Menu Retirement Retirement Retirement plans & accounts Learn the basics Retirement calculators Additional resources Elevate your Bankrate experience Get insider access to our best financial tools and content Advertiser Disclosure
Advertiser Disclosure
We are an independent, advertising-supported comparison service. Our goal is to help you make smarter financial decisions by providing you with interactive tools and financial calculators, publishing original and objective content, by enabling you to conduct research and compare information for free - so that you can make financial decisions with confidence.
Bankrate has partnerships with issuers including, but not limited to, American Express, Bank of America, Capital One, Chase, Citi and Discover. SHARE: Westend61/Getty Images May 25, 2022 Checkmark Bankrate logo How is this page expert verified? At Bankrate, we take the accuracy of our content seriously. "Expert verified" means that our Financial Review Board thoroughly evaluated the article for accuracy and clarity. The Review Board comprises a panel of financial experts whose objective is to ensure that our content is always objective and balanced. Their reviews hold us accountable for publishing high-quality and trustworthy content. Cathleen's stories on design, travel and business have appeared in dozens of publications including the Washington Post, Town & Country, Wall Street Journal, Marie Claire, Fodor’s Travel, Departures and The Writer. Bankrate logo The Bankrate promise
At Bankrate we strive to help you make smarter financial decisions. While we adhere to strict editorial integrity, this post may contain references to products from our partners. Here's an explanation for how we make money. The content on this page is accurate as of the posting date; however, some of the offers mentioned may have expired. Terms apply to the offers listed on this page. Any opinions, analyses, reviews or recommendations expressed in this article are those of the author’s alone, and have not been reviewed, approved or otherwise endorsed by any card issuer. Bankrate logo The Bankrate promise
At Bankrate, we have a mission to demystify the credit cards industry — regardless or where you are in your journey — and make it one you can navigate with confidence. Our team is full of a diverse range of experts from credit card pros to data analysts and, most importantly, people who shop for credit cards just like you. With this combination of expertise and perspectives, we keep close tabs on the credit card industry year-round to: Meet you wherever you are in your credit card journey to guide your information search and help you understand your options. Consistently provide up-to-date, reliable market information so you're well-equipped to make confident decisions. Reduce industry jargon so you get the clearest form of information possible, so you can make the right decision for you. At Bankrate, we focus on the points consumers care about most: rewards, welcome offers and bonuses, APR, and overall customer experience. Any issuers discussed on our site are vetted based on the value they provide to consumers at each of these levels. At each step of the way, we fact-check ourselves to prioritize accuracy so we can continue to be here for your every next. Bankrate logo Editorial integrity
Bankrate follows a strict , so you can trust that we’re putting your interests first. Our award-winning editors and reporters create honest and accurate content to help you make the right financial decisions. Key Principles
We value your trust. Our mission is to provide readers with accurate and unbiased information, and we have editorial standards in place to ensure that happens. Our editors and reporters thoroughly fact-check editorial content to ensure the information you’re reading is accurate. We maintain a firewall between our advertisers and our editorial team. Our editorial team does not receive direct compensation from our advertisers. Editorial Independence
Bankrate’s editorial team writes on behalf of YOU – the reader. Our goal is to give you the best advice to help you make smart personal finance decisions. We follow strict guidelines to ensure that our editorial content is not influenced by advertisers. Our editorial team receives no direct compensation from advertisers, and our content is thoroughly fact-checked to ensure accuracy. So, whether you’re reading an article or a review, you can trust that you’re getting credible and dependable information. Bankrate logo How we make money
You have money questions. Bankrate has answers. Our experts have been helping you master your money for over four decades. We continually strive to provide consumers with the expert advice and tools needed to succeed throughout life’s financial journey. Bankrate follows a strict , so you can trust that our content is honest and accurate. Our award-winning editors and reporters create honest and accurate content to help you make the right financial decisions. The content created by our editorial staff is objective, factual, and not influenced by our advertisers. We’re transparent about how we are able to bring quality content, competitive rates, and useful tools to you by explaining how we make money. Bankrate.com is an independent, advertising-supported publisher and comparison service. We are compensated in exchange for placement of sponsored products and, services, or by you clicking on certain links posted on our site. Therefore, this compensation may impact how, where and in what order products appear within listing categories. Other factors, such as our own proprietary website rules and whether a product is offered in your area or at your self-selected credit score range can also impact how and where products appear on this site. While we strive to provide a wide range offers, Bankrate does not include information about every financial or credit product or service. You may be familiar with the old adage “neither a borrower nor a lender be.” But borrowing and repaying responsibly can actually work to your advantage when it comes to credit cards. Using a credit card responsibly by keeping your spending to a minimum and making on-time payments each month shows financial institutions you’re capable of managing your money, and can be trusted with their money in the future should you ever need a higher credit limit or a loan. Charging expenses on credit cards, however, could also open the door for overspending and ultimately lead to an unmanageable debt balance. Here’s what you need to know about paying with plastic. Psychology of credit cards
When it comes to credit cards, you might find that resorting to them as your primary payment method can remove the feeling that comes with forking over cold, hard cash. You might lose track of how much you’re spending when you can’t physically see how much you’re spending. AKA: the pain of paying. According to University of Toronto Researcher Dilip Soman, those who have a history of using credit cards as a form of payment more than those who have a history of paying with cash or checks. However, it’s important to remember that keeping tabs on your spending is key to making sure you don’t overdo it and receive a bill that could throw your budget off balance. If you want to set yourself up for success, on your account that will notify you once you’ve spent a certain amount. You can also automate your monthly payment so that you don’t accidentally forget to pay your bill and regret it later when you see your credit score has been knocked down a few points. Benefits of Credit Cards
Credit cards, when managed responsibly, can be a valuable financial tool for more manageable, earning rewards and building your credit so you qualify for lower interest rates on future loans. Whether you’re a jetsetter looking to save on your next adventure, or you just want to earn some money back on your regular expenses, using a credit card that’s can be incredibly rewarding and save you a lot of money in the long run. If you already have a few debit cards and you’re wondering why you may want to add a credit card to your wallet, here’s a look at how credit cards differ from your traditional debit card. Credit Cards Debit Cards Funds can be used to spread purchases over time, even if you don’t have that money readily available at the time of purchase Funds are drawn directly from a checking account Build’s credit history Does not build credit history Can lead to debt spiral if not managed properly Preferable for those who want to avoid debt accumulation Interest applies if balance is carried over from month to month No interest charges Requires signature to complete transaction Requires pin to complete transaction Limited liability for fraudulent purchases You could be liable for fraudulent purchases Fees include late, return payment, balance transfer, cash advance and/or foreign transaction fees Fees include overdraft and out-of-network ATM fees, as well as fees for using your PIN during transactions Overall, the right type of credit card will vary from consumer to consumer, but if you hope to reach some of your bigger financial milestones like purchasing a vehicle, buying a home, or borrowing money to start a business, you’ll need a positive to do so. That begins with showing lenders that you know how to use a credit card wisely. A few expenses you might want to charge on your card: Appliances or electronics: Using a for these purchases will allow you to over time. Rental cars or hotel accommodations: Typically, these merchants will require a credit card to cover the cost of incidentals. Online purchases: Because credit cards usually have more in place than debit cards, you may want to consider using it as a primary payment method for all online purchases. Purchases : Credit cards are pretty widely accepted all over the world. When traveling, you’ll want to make sure you have at least one credit card with you for all of your purchases. It’s also a safer alternative to carrying a large amount of cash. Just remember to notify your credit card company that you’ll be abroad so you don’t hit any roadblocks once you arrive at your destination. What should I consider when spending on a credit card
Before you swipe your card at the register, you’ll want to take a few factors into consideration. Pay close attention to the fine print on your credit card terms, you’ll want to know what your interest rate is. That’ll determine how much it’ll cost you to carry a balance on your card. And your credit line will tell you how much credit you have available to spend. Although, most experts recommend keeping your (how much you’re spending compared to the amount of credit still available) to no more than 30 percent. The key to building and maintaining a is to keep your spending below that 30 percent threshold and make sure that you’re only using your credit card to pay for purchases that you know you’ll be able to pay off by the time your bill is due. Carrying a balance from month to month can cost you over time and a late payment will likely ding your credit score. The bottom line
Credit cards can be a useful financial tool. By practicing a few good habits when using your credit card, you can ensure that you’re able to build a positive credit history for your long-term financial goals and give yourself a little extra spending power right now. SHARE: Cathleen's stories on design, travel and business have appeared in dozens of publications including the Washington Post, Town & Country, Wall Street Journal, Marie Claire, Fodor’s Travel, Departures and The Writer. Related Articles