3 Burning Questions: Credit Cards

Mountain America Credit Union has provided a lot of education around credit cards over the past several months—covering topics like the benefits of using a credit card, how to use a credit card responsibly, how to pay off your credit card debt and types of purchases you should make with your credit card, just to name a few.

 

Now, we’re answering questions directly from our members! We talked with the experts at Mountain America and asked them what credit card questions they get asked the most. Check out their answers below.

 

Question #1: How can using a credit card help me build or repair my credit score?

 

If you’re serious about building or repairing your credit, using a credit card is one of the quickest and most effective ways to do it—as long as you’re committed to using it responsibly. The last thing you need is to accumulate more debt.

 

Here’s what you need to know:

• Use your credit card regularly and pay your balance in full each month to avoid interest fees.

• Pay on time, always. To make sure you don’t miss the due date, set up monthly automated payments for the full balance or at least the minimum payment. This will ensure your credit score doesn’t take a hit for a missed or late payment.  

• Earn rewards from everyday expenses like groceries, gas, cell phone and utilities with your credit card. Since you’ve already budgeted the money for these expenses—just charge them and then pay them off immediately.

• Keep your balance under 30% of your total credit limit since your credit score will be negatively affected if you have a higher utilization rate.

• Consider applying for a secured credit card if you’d like to get a new credit card to help repair your credit but are concerned about whether you’ll qualify. This type of credit card is tied to a savings or checking account that has at least the amount of the credit limit requested. These funds will be held for the duration of the Visa loan. Once your credit score improves, apply for a regular credit card and, if approved, the funds will be released.

   

Question #2: What should I do if I find fraud on my credit card?

 

Part of being a responsible credit card user is reviewing your accounts often. If you want to be vigilant about fraud, be sure you’re logging in to your online or mobile accounts at least weekly, or even daily, to view the transactions. If you find a charge you don’t recognize, here’s how to proceed:

 

• Report the fraud to your credit card issuer right away. A block will be placed on your card and a new card will be issued.

• Keep an eye on your accounts. It’s possible that, after gaining access to one account, a fraudster may be able to compromise another. Be sure to report all unauthorized transactions right away. Many credit card companies have zero-liability policies—meaning you won’t be held liable for fraudulent charges.

• Sign up for transaction alerts so that you’ll be notified quickly if unauthorized charges occur and, if you’re a Mountain America member, utilize tools like Card Manager to freeze (and unfreeze) your card when needed.

   

*Check with your card issuer for information regarding fraud liability policies.

 

Question #3: Are there ways to use a credit card, and earn rewards, without paying interest?

 

If you’ve avoided using your rewards credit card in the past because you didn’t want to pay the high interest charges, you’ve been missing out on some serious free money! There are ways to avoid interest and still get the benefits of a rewards credit card—here’s how to do it:

 

• Know when your grace period ends. Most card issuers offer a grace period that allows you to pay off your balance within a certain time frame without added interest. These grace periods are typically between 21–27 days from the time you receive your billing statement. When you pay your bill in full during this period, you’ll avoid interest and still earn rewards on your purchases.

• If you can’t seem to remember the day the grace period ends, try setting up automatic monthly payments for the full balance due. No interest fees here!

   

Once you get used to paying your balance in full every month, it’s time to figure out how to maximize those rewards points.

 

• Try using your credit card for everyday expenses like utilities, cell phone, gas, groceries, etc. The pre-budgeted expenses can help you build your points total even faster!

• This spending switch may leave you feeling a little out of the loop if you’re used to using your debit card. No worries—just pay your balance more often. Try paying it weekly or, if you want to get closer to a real-time balance, daily.
   

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