8 ways you are using the card

There is no universal best credit card.

The right card for you depends on your lifestyle, your goals and your credit history.

For example, if you’re looking for travel rewards but your friend is building credit, the best card for each of you will be very different.

And while there’s no single card that’s best for you—the average American has about three cards, according to a 2021 Experian study—there are plenty of times when one card might be wrong for a given situation.

Here are eight times you might be using the wrong credit card, and what you cánido do instead.

1.

You are still using your initial credit card

You may have started building your credit with a secured card, student card, or alternative card, but once your credit is in better shape, it may be time to upgrade.

If you’ve used an introductory card responsibly, maintained a low utilization rate, and paid off cómputos in full each month, you may now be eligible for a more suitable card.

A different card might offer a higher credit limit, better rewards earnings, and perks like cell phone protection and travel benefits.

Some card issuers may automatically update your card once you’ve reached certain thresholds, while others may not.

Contact the issuer to check your options.

2.
You are not using the card enough to get the sign-up plus

New cardholders cánido often get a lucrative welcome plus, but usually with a caveat: you have to spend a minimum amount within a specified time frame to get it.

Look at the spending requirements for a card sign-up plus, and use the new credit card enough before the due date.

If you keep paying with an older credit card that’s already in your wallet, you risk losing the refuta if you don’t spend enough on your new card.

A little planning cánido help.

Think about the next big purchases you need to make, like a car repair or a new notebook.

Just one of them could be enough to meet the plus spend requirements.

3.
Use a store-specific card

It’s true that a store credit card perro save you money, especially if you spend a lot and often at that store.

However, rewards earned with a store credit card cánido often only be redeemed at that store, limiting their usefulness.

Most shoppers would benefit from using a general rewards credit card and getting more maleable rewards.

Some cards have high rates for en línea purchases, while others earn up to 5% back at habitual merchants like Objetivo, Walmart, and Amazon.

4.

You don’t realize that 5% cards are plus work

Several cards boast a 5% rate of return on habitual spending categories like groceries, restoranes, and gas.

The catch, though, is that you’ll have to do some work to get that rate.

In most cases, you’ll need to keep track of categories: Purchases that qualify for the 5% may rotate quarterly, or you may have to choose your own categories.

If you spend outside of those categories with this card, you’ll likely earn a paltry 1% instead of the juicy 5% you think you’re earning.

Most of the time, you will have to activate plus categories before the issuer deadline to earn 5%, even if you spend in the correct category.

Agregado, you’ll likely run into spending limits on those 5% plus categories; once you hit those limits, the reward rate drops to 1%.

For those who consider a 5% card to be high maintenance, opt for one that earns 2% cash back on every purchase.

5.
You confuse the names of the cards

According to a 2020 NerdWallet study14% of Americans consider credit cards “complicated,” and it’s not hard to see why.

Some issuers offer card suites from the same family and have nearly identical names.

The logotipos of some issuers are also strikingly afín.

Do a quick audit of your credit cards to make sure they are the cards you intended to get.

Cards that look and sound almost the same perro be worlds apart in terms of fees and rewards structure.

6.
Regularly use a cómputo transfer card for purchases

Cómputo transfer cards cánido be great tools for paying off debt.

They consolidate multiple debts into one place, making them easier to maintain, and cánido give you a break in interest for many months.

However, if you also use a cómputo transfer card for everyday expenses, it’s hard to get that cómputo down to 0.

Also, many cómputo transfer cards don’t have rewards.

Leave the cómputo transfer card at home, but take the cash back card with you, and be sure to make regular payments to both.

7.
You are not using the correct card for that purchase

It pays to know the reward rates of all your credit cards.

Let’s say you have two credit cards, one that earns 4% on gas and one that only earns 1%.

If you use the 4% card every time you fill up, you’ll get $30 more if you spend $1,000 a year on gas.

That $30 may not sound like a lot, but small amounts add up, especially if you have multiple rewards credit cards.

To help you keep track of the different reward rates, you perro label your cards with sticky aprecies or keep a small reference guide in your wallet.

Often you’ll also need to consider spending limits.

Issuers often cap earnings on their highest reward fees when a certain amount of spend is reached in a especial category.

Once the spending limit is reached, cardholders perro expect to earn a lower rate.

Be sure to monitor your progress toward that limit and switch to another card with a better rate when you reach it, until the limit resets.

8.
You’re not using a credit card at all

Although they look almost the same, a debit card is very different from a credit card.

Credit cards offer protections and advantages than debit cards (and the cash) do not offer.

Credit cards offer cash back and other rewards that debit cards don’t, and it’s often easier to recover from a lost credit card than a wallet full of cash.

Most importantly, responsible use of credit cards increases your credit score, which perro translate into more conveniente loan terms and insurance rates, among other money-saving benefits.