How often should I use my credit card

By Sarah R Reviewed by Izzy M Edited by Nooreen B
Modified on February 20, 2024
how often should i use my credit card

Having a credit card can be a huge help, especially during unexpected financial emergencies. But if used too often, your credit card can also become a major financial burden. Knowing when you should use your credit card and for what kinds of purposes is essential if you want to maintain good financial habits. Below is more information on when it is appropriate to use your credit card and the potential benefits of spending responsibly! 

Benefits of Using a Credit Card for Purchases

While you never want your credit card spending to get out of control, there are many perks customers can take advantage of when spending with credit. Check out these benefits you may enjoy when you use your credit card.  

Build Credit

Credit cards can be a great asset to building credit when used responsibly. Credit bureaus pay close attention to payment history and how timely customers are with paying off their debt. By making your purchases on time and in the correct amount, you may start to see an improvement in your payment history on your credit report. 

Earn Financial Rewards

Many credit cards give consumers benefits just for using their card to make purchases. Some credit cards offer customers a certain percentage of cashback on every purchase or purchases made at specific establishments like grocery stores or gas stations. With cashback rewards, you can essentially earn free money just by making everyday purchases you were going to make anyway. 

Consumer Protection

Using a credit card to make purchases also gives you an added layer of financial protection. Suppose you used a credit card and accidentally double-purchased something or were wrongfully charged. In that case, you can dispute the charge on your credit card and not be responsible for the money charged. If these wrongful charges or purchases were made with a debit card, the funding would be instantly removed from your bank account. By using credit and not your bank account, there is a financial buffer between purchases and the money you have in your checking account.

Easily Track Spending 

You don’t have to worry about tracking your purchases with credit card spending. When you make in-person or online purchases using a credit card, you’ll have a digital record of all of your transactions on your account. If you are trying to establish a budget, having a full record of everything you purchased over the past few weeks or months will be helpful. If you regularly use cash, it can get difficult to remember all your purchases unless you write everything down yourself. 

When Should I Use My Credit Card?

When should you think about using a credit card instead of a debit card? While it may not be a good idea to use your credit card for all of expenses, there are some instances when a credit card comes in handy. 


Financial emergencies may be the most convenient time to use a credit card, depending on the emergency. If you received a parking ticket or other surprise bill and didn’t have the immediate funds to cover the expense, a credit card may be a huge help. Instead of worrying about where you are going to get sufficient funds or turning to unreliable loans like easy payday loans, you can take care of your unexpected expenses with a credit card. 

However, there are a few types of financial emergencies where you may not want to rely on your credit card. For example, if you receive a hefty unexpected expense, because of something like an impromptu trip to the ER, the amount of money you owe may be too much to put on a credit card. Credit cards are best for smaller financial emergencies where you can reasonably pay off the balance in a few weeks or months or less. 

Affordable Planned Purchases

Using your credit card to make affordable planned purchases can be quite helpful. For instance, say you needed to travel out of town for a wedding but were short on cash. Beforehand, budget out your expenses like a potential hotel stay, a wedding gift, etc. Having an idea of how much you need to spend will help you create a payback plan. Then, when it’s time for the event, you can use your credit card to make any necessary purchases. Afterward, in the coming weeks, as you receive paychecks or other forms of income, you can work towards paying off your balance.

Minor Expenses

While you don’t want to totally rely on your credit card to pay bills, setting up automatic payments for a small bill or expense may help your credit card account in the long run. Some credit card issuers may close an account if they see prolonged credit card inactivity. To keep your card active, you may want to set up auto-pay for some kind of minor expense. If you don’t feel comfortable using your credit card for auto-pay, try to use your credit card for a small purchase every now and then so your credit card companies know your account is active. 

What Is a Credit Utilization Ratio?

How many credit cards you have, along with your balances on each card, is what makes up your credit utilization ratio, also referred to as your credit utilization rate. For example, say you have two credit cards, both with a limit of $1,000, making your total available credit $2,000. If you had a balance of $500 on each card, that would make your credit utilization rate 50%. Since you are using $1,000 of your total combined $2,000 credit limit, that means you are using half of your available credit. 

Typically, credit bureaus and financial institutions like to see low credit utilization ratios because that usually indicates borrowers have a habit of paying back their credit balances. 

How Often Should I Apply With a Credit Card Issuer?

You should only apply for a credit card when it is absolutely necessary. How often you apply for credit cards can have a significant impact on your credit reports. Each time you apply for a card, the credit card company will request a hard credit check to see what your credit score is. A hard credit check is a formal inquiry into your credit history.

Credit bureaus keep track of how many hard inquiries consumers have and include that data on their credit profile. If you have a significant amount of hard inquiries on your credit report, lenders may see this behavior as a sign that you are an irresponsible borrower. Typically, those with higher credit scores have a minimum number of hard credit inquiries on their profile. 

How Many Credit Cards Should I Have?

Some people may think that having multiple credit cards will help them afford more purchases, but this is not always the case. Having multiple credit lines puts consumers at risk of accumulating an overall credit card balance that is difficult to pay off. Instead of seeking out additional cards, perhaps just try to get a high credit limit on your primary card. It may be best for the good of your payment history to have a single card. Spending money on one credit card can be much more manageable than spending on multiple cards. 

Tips for Paying Back Your Credit Card Issuer

If you are currently dealing with Credit card debt, it is important to prioritize minimizing your balance. Having a low credit utilization ratio is important not only for the health of your credit score but for your overall financial well-being. Below are a few tips you can try for paying off your credit card balances: 

  • Pay more than your minimum amount due.
  • Make your payments on or before your due date to avoid late fees.
  • Avoid applying for additional credit cards.
  • Sell unwanted items around your house to earn extra money for paying off your balance. 

When Is It a Good Idea to Close an Account with Credit Card Issuers?

Sometimes, for the good of your Personal finance, you may find it is the best decision to close your credit card account. A few signs that it may be time for a credit card account closure are:  

  • You have accumulated so much credit card debt you cannot responsibly pay your minimum payment due anymore. 
  • If you cannot afford processing fees, your annual fee, interest payments, or other charges associated with your account.
  • You cannot resist the temptation to impulse spend and repeatedly overspend using your credit card.

While there are benefits to having a credit card account open, sometimes having a closed account will benefit you more in the long run.  And while you may feel like you have the best credit card for large purchases, it’s important to be able to completely pay off the card any time you use it.

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