Your Beginner’s Guide to Credit Cards: 7 Tips We Think You Should Know

Girl laying on her stomach looking at a credit card.

Utilizing a credit card responsibly can help improve your credit and simplify your cash flow. If you’re new to credit cards or need a refresher on how to make the most of using one, we’ve put together a list of best practices.

7 things we think all credit card users should do.

1. Pay on time.

The best way to maintain (and even improve) your credit score is to pay your bill on time every month. You may want to consider setting up automatic payments from your checking account to ensure your payment is never late.

2. Pay your entire monthly balance.

Remember interest will be charged to any unpaid balance on your credit card — so it’s best, if you can, to pay your balance in full every month. It helps to make a budget and keep your spending in line with it. That way, when you use your card to pay, you’ll only pay that price and nothing more. Sometimes you might not be able to pay off your entire balance. In that case, make sure to put together a plan to pay it off as soon as you can, this will minimize the amount of interest that accrues and the amount you’ll end up owing.

3. Keep your utilization rate low.

Your credit card utilization rate is the percentage of credit available on your credit line. Most of us know we don’t want to go over the amount of available credit, but you may not know that ideally, you want to keep your utilization rate to no higher than 30%. For example, if you have a credit limit of $500, you should try to keep your balance to no more than $150.

4. Review your monthly statement.

When you receive your monthly statement by mail or online, make sure to thoroughly review it. If you notice an unauthorized transaction, let your credit card company know immediately. By proactively reviewing your statement, you’ll protect yourself from fraud and manage your credit card more effectively.

5. Keep your card secure.

Protecting your card from unauthorized use is very important. Never leave your credit card unattended or loan it to someone else to use. If you don’t plan on carrying your credit card with you, make sure it’s in a secure location in your home. Also, if you shop online consider what retailers you allow to store your credit card information, as this information may be susceptible to data breaches. Using a secure online payment service like VISA SRC® or PayPal®, can minimize your risk and speed up online checkout too. If you suspect your card is ever lost or stolen, let your credit card company know immediately so they can put a hold on your card until it’s found or replaced. You might also consider using a service like Bank of Colorado CardControl to turn your cards off and on, as well as manage where they can be used.

6. Avoid cash advances.

You may be able to access cash using your credit card — but this isn’t recommended. Usually, when you take a cash advance from your credit card, you’ll pay higher rates and fees. If you need extra cash, you should consider a personal loan as the rates and terms may be better.

7. Use your rewards.

If you decided to get a credit card because of a rewards program associated with it, make sure you use it! This is especially important if you’re paying an annual fee for those benefits. At Bank of Colorado, qualifying credit cardholders, with a credit score of 700 or higher, receive uChoose Rewards® free of charge.

When you keep these best practices in mind, you’ll be on the right foot to improving your credit score over time and enjoying the convenience of a credit card. If you’re ready to take the next step with a new credit card, we’d love to help. You can find our Bank of Colorado Visa® Credit Card application and more information here.


Bank of Colorado credit cards are only available to existing customers.