View original document

The full text on this page is automatically extracted from the file linked above and may contain errors and inconsistencies.

The Federal Reserve Board

5 Tips for Getting the Most from Your Credit Card
1. Pay on time.
Paying your credit card account on time helps you
avoid late fees as well as penalty interest rates applied
to your account, and helps you maintain a good credit
record. A good credit record leads to a higher credit
score, which helps you qualify for lower interest rates.
Know the date your payment is due. If your bill is due
at an inconvenient time of the month—for example,
if it’s due on the 10th and you get paid on the 15th—
contact your credit card company to see if they will
change your billing cycle to fit your cash flow.
2. Stay below your credit limit.
If you go over your credit limit on your card, your
card issuer could charge a fee and increase your interest rate to a higher penalty rate. To avoid this, keep a
record of your spending or check your balance online.
Also, be aware that some merchants (for example,
hotel and car rental companies) put a “hold” on your
credit card based on their estimate of the amount you
will charge. This can reduce your available credit until
the final charge is processed. See “Credit and Debit
Card Blocking” (

Repayment Calculator (
creditcardcalculator) to determine possible repayment
5. Watch for changes in the terms of your
Credit card companies can change the terms and conditions of your account. They will send you advance
notices about changes in fees, interest rates, billing,
and other features. By reading these “change in terms”
notices, you can decide whether you want to change
the way you use the card. For example, if cash advance
fees increase, you may decide to use a different card
for cash advances. If you have a card with a variable
rate or if you have an introductory rate that is ending,
be aware that credit card companies are not required
to send you a notice about raising your interest rate.
Interest rates are listed on your
monthly bill. Read your
bill carefully and
take note of any

3. Avoid unnecessary fees.
Credit card companies not only charge late payment
and over-the-limit fees, but also fees for cash advances,
transferring balances, and having a payment returned.
Some companies charge a fee when you pay your bill
by phone. Pay attention to the transactions that trigger these fees. If you need a cash advance, withdraw
enough so that you don’t have to take a second cash
advance—and incur a second fee—later in the month.
Read your credit card agreement to learn more about
the fees that your credit card company charges. For
more information see “What are the fees?” (www.
4. Pay more than the minimum payment.
If you can’t pay your balance in full each month, try to
pay as much of the total as you can. Over time, you’ll
pay less in interest charges—money that you will be
able to spend on other things, and you’ll pay off your
balance sooner. See the Federal Reserve’s Credit Card
For more consumer information, please visit the Board of Governors of the Federal Reserve System online at