Smart credit card use means more than paying your bills on time. It also means protecting yourself from fraud, using rewards to your benefit and allowing your plastic to help build your credit score.
Check statements and your credit report
Even if you avoid risks — like swiping at the pump — you should remain vigilant against fraud. That means checking your monthly credit card statements and regularly looking at your credit reports.
Your statement will reveal signs of fraud, such as whether a criminal took your existing credit card number and used it to make illicit purchases. If you find an unusual charge, contact your credit card company immediately.
Your credit reports will reveal whether someone used your personal information to open new accounts in your name. If you find a credit card, mortgage or other account on your credit report that doesn’t belong to you, contact the creditor immediately.
Set up mobile alerts
If you’re not the type of person who is disciplined enough to regularly check your credit card account, you can automate the fraud detection process. Many large issuers now will let you set up mobile alerts that will alert you:
- When you’re approaching your credit limit.
- If the card company detects unusual activity, like spending that doesn’t fit your usual pattern, or transactions in unusual or unfamiliar locations.
- When your card has been used. You can set this for large purchases, all purchases or anything in between.
Pay off high-interest debt
After you’ve thoroughly protected yourself from fraud, it’s time to start looking at how you actually use your credit cards.
Do you frequently carry a balance? Now’s the time to get that under control.
Further rate hikes would increase monthly minimums, causing “payment shock” for some. The lesson: Start paying down credit card debt now before a rate hike takes a bite.
Ask for a higher credit limit
If your credit score could use some help, here’s a simple way to boost it: Ask your credit card company to raise your credit limit.
A recent Bankrate survey found that eight in 10 credit card holders who asked for a credit-limit increase were approved. But just 28 percent of cardholders had ever bothered to ask.
A higher limit could help your score because it would boost your available credit, lowering your utilization in the process.
But this only works if you don’t use that additional credit available to you.