Credit Card Advice We're Tired of Hearing: Top 3 Tips to Forget

By , CardRatings Contributor
Our credit card articles, reviews and ratings maintain strict editorial integrity; however we may be compensated when you click on or are approved for offers (terms apply) from our partners. How we make money.

Ever feel like you'll scream if you have to hear the same credit card advice one more time? Let's take a look at three of the most popular tips you're tired of hearing--and improve on them.

#1 Don't use credit cards

Really? Unless you're a compulsive spender, this advice is puzzling. Using credit cards responsibly offers many benefits. It gives you a credit history, which will come in handy when you need it. That new home you have your eye on? It's not happening without a stable credit history.

If you lost your job during the economic meltdown, you might be in a position where you got into debt and now need to rebuild your credit. Using your cards and paying your bills on time will help repair your score. It takes time, but it works.

#2 Don't use more than 30 percent of your available credit

You've probably heard about your "credit utilization rate." It can get a little confusing, so here's an example:

Let's say your total credit card debt balances equal $5,000 and the total limit across all of your cards equals $20,000.

Your utilization rate = 5,000/20,000 = .25, or 25 percent.

Now, having a utilization rate under 30 percent may have been good advice before the economic meltdown. But if you want a higher credit score, pay off some debt and knock your utilization rate down to about 10 percent. These days, issuers love consumers with great scores.

#3 Use credit cards for emergencies only

If you pay your debt off when the statement comes, there are some cost-saving and practical reasons to use your card regularly.

Some card issuers are bringing back inactivity fees. The terms and conditions vary, but you could be charged an inactivity fee if you don't use your card for more than six months. And what about getting rewards points? If you choose a rewards card that suits your lifestyle, you can even save money.

One more reason: If you're heading out for a celebration dinner, do you really want to carry around that much cash? Sometimes, using your credit card is just the practical--and safe--thing to do.

Featured Partner Cards


  1. Amber Stubbs
    April 08, 2010 - 10:41 pm
    Bruce, I think Chase just made a random round of credit line cuts. I thought it was related to old WaMu cards though. Would be interested to know if that's the case with the card you mentioned.
    Thanks for your comment!
      Reply »  
  2. Bruce
    April 06, 2010 - 11:15 pm
    Tip 3 is a little difficult in todays climate. I just got off the phone with Chase and asked why they whacked my credit limit from $8,500 to $500. Over the last three years I've had zero lates and zero over limits with this card; plus I have an excellent credit score. According to Chase "I didn't use the card enough."
    At first I was going to cancel but no, I decided to use the card enough to be a pain in the butt...thanks for nothing Chase.
    Thank God for my Credit Union...I've had zero problems and lower rates with their Visa.
      Reply »  
  3. Carroll B. Merriman
    April 05, 2010 - 7:24 pm
    I found your site via google thanks for the post. I will save it for future reference. Thanks
      Reply »  
  4. Jaden Jones
    March 28, 2010 - 4:36 am
    Thanks for your advice. I'm totally agree that we have to forget the top 3 tips mentioned above. The most important thing among all tips - is to build or improve one's credit score. I think that people who are landed with debts need to figure out ways to improve their own credit score. In order to raise one's credit score, one has to settle their card debts on their own although some prefer to have debt settlement companies to help them to get rid of their card debts. I have some card debt relief basics
    Your mentioned tip no.3 - "Use credit cards for emergencies only": this tip is targeted to readers who have over-spending habits, especially for those who have the potential of filling for bankruptcy.
      Reply »