By Bev O'SheaThe Best (and Worst) Ways to Use a Credit Card
By Bev O'Shea
Quick Answer
A credit card can help you build credit, manage your money, earn rewards and benefit from consumer protections. But it could tempt you to make impulse purchases, live above your means and land you in a cycle of fees and debt.
Ideally, a credit card is a convenience. It allows you to avoid carrying cash and can buy you some time before you need to pay off your purchases.
A credit card can also help you manage your money, cover emergency expenses, build credit and earn rewards. But it could tempt you to buy on impulse, live above your means and land you in a cycle of fees and escalating penalty interest rates. Let's go over some of the best—and worst—ways to use a credit card.
The Best Ways to Use a Credit Card
Used responsibly, a credit card can help you manage your finances and improve your credit.
To Build Credit
There are a few ways you can use a credit card to build your credit:
- Become an authorized user. Becoming an authorized user means that a credit card holder has allowed you to make charges on their account. It's important that you and the primary user agree on whether you will actually use the card and, if so, how much you will spend. Authorized users are not responsible for paying credit card bills, but the card's payment history will be added to their credit reports.
- Get a secured credit card. Secured credit cards are cards that require a deposit, which is typically the same amount as the credit limit. They work just like traditional, unsecured credit cards, and some have a feature that allows you to "graduate" to an unsecured card after a certain number of on-time payments.
- Explore alternative credit cards. Some credit cards rely on data other than credit scores to issue credit cards without a deposit. Interest rates may be higher, and they may have fees, but cards that consider alternative credit data can offer a good starting point.
To Finance New Purchases
If your refrigerator stops working and you need a new one on short notice, or you're faced with another financial emergency, a credit card can save the day. It pays to know the interest rates of your credit cards and how it will affect your costs. If you are going to need to carry a balance, you'll want to use the card with the lowest interest rate.
To Pay Off Debt
If you have a good or excellent credit score, you may qualify for a credit card with a 0% intro APR on purchases or balance transfers. Using the card to pay off other debt can potentially save you money on interest. Take a look at the math to be sure you are saving money, and make a plan to pay off the balance before the intro period ends and your interest rate goes up. It's also smart to know if this could affect your credit score. (A credit score simulator can help you make an educated guess.)
To Earn Rewards
If you pay off your credit card bill in full every month, you can maximize the value of your rewards. (You will also earn rewards if you carry a balance, but the interest you pay can outweigh your rewards.) If you play your cards right, you might be traveling for free or buying holiday gifts with points or cash back.
Best rewards cards of 2026
Compare cards from our partners that earn points, cash back or miles on everyday spending.
Offers from our partners
Citi Double Cash® Card
Intro APR:0% for 18 months on Balance Transfers
Ongoing APR:17.49% - 27.49% (Variable)
Rewards:2% (cash back)
Annual Fee:$0
Blue Cash Everyday® Card from American Express
Intro bonus:You may be eligible for as high as $200 cash back after spending $2,000 in purchases on your new Card in the first 6 months. Welcome offers vary and you may not be eligible for an offer. Cash back is received as Reward Dollars, redeemable for statement credit or at Amazon.com checkout. Terms Apply.
Intro APR:0% on Purchases and Balance Transfers for 15 months
Ongoing APR:19.49%-28.49% Variable
Rewards:1% - 3% (cash back)
Annual Fee:$0
Discover it® Chrome
Intro bonus:INTRO OFFER: Unlimited Cashback Match for all new cardmembers. Discover will automatically match all the cash back you’ve earned at the end of your first year! There’s no minimum spending or maximum rewards.
Intro APR:0% intro APR for 6 Months on Purchases and 0% intro APR for 18 Months on Balance Transfers
Ongoing APR:17.49% - 26.49% Variable APR
Rewards:1% - 2% (cash back)
Annual Fee:$0
The opensky® Secured Visa® Credit Card
Ongoing APR:23.89% Variable
Rewards:10% (cash back)
Annual Fee:$35
Credit One Bank American Express® Card for Rebuilding Credit
Ongoing APR:29.74% Variable
Rewards:1% (cash back)
Annual Fee:$75 First year. $99 thereafter, billed monthly at $8.25
Blue Cash Preferred® Card from American Express
Intro bonus:You may be eligible for as high as $300 cash back after spending $3,000 in purchases on your new Card in the first 6 months. Welcome offers vary and you may not be eligible for an offer. Cash back is received as Reward Dollars, redeemable for statement credit or at Amazon.com checkout. Terms Apply.
Intro APR:0% on Purchases and Balance Transfers for 12 months
Ongoing APR:19.49%-28.49% Variable
Rewards:1% - 6% (cash back)
Annual Fee:$0 intro annual fee for the first year, then $95.
American Airlines AAdvantage® MileUp® Card
Intro APR:0% for 15 months on Balance Transfers
Ongoing APR:19.49% - 29.49% (Variable)
Rewards:2x (Miles per dollar)
Annual Fee:$0
Citi Strata Premier® Card
Intro bonus:Earn 60,000 bonus ThankYou® Points after spending $4,000 in the first 3 months of account opening, redeemable for $600 in gift cards or travel rewards at thankyou.com.
Ongoing APR:19.49% - 27.49% (Variable)
Rewards:1x - 10x (Points per dollar)
Annual Fee:$95
Costco Anywhere Visa® Card by Citi
Ongoing APR:18.74% - 26.74% (Variable)
Rewards:1% - 5% (cash back)
Annual Fee:$0
American Express® Gold Card
Intro bonus:You may be eligible for as high as 100,000 Membership Rewards® Points after spending $6,000 in eligible purchases on your new Card in your first 6 months of Membership. Welcome offers vary and you may not be eligible for an offer.
Ongoing APR:See Pay Over Time APR
Rewards:1x - 4x (Points per dollar)
Annual Fee:$325
First Latitude Secured Mastercard® Cash Back Rewards
Ongoing APR:27.49% Variable
Rewards:1% - 10% (cash back)
Annual Fee:$0
Citi® / AAdvantage® Platinum Select® World Elite Mastercard®
Ongoing APR:19.49% - 29.49% (Variable)
Rewards:2x (Miles per dollar)
Annual Fee:$99, waived for first 12 months
Avant® Cashback Rewards Mastercard®
Ongoing APR:35.99%*
Rewards:1% (cash back)
Annual Fee:$75*
Citi® / AAdvantage® Globe™ Mastercard®
Ongoing APR:19.49% - 29.49% (Variable)
Rewards:1x - 6x (Miles per dollar)
Annual Fee:$350
Avant® Cashback Rewards Mastercard®
Ongoing APR:35.99%*
Rewards:1% (cash back)
Annual Fee:Introductory fee of $75 for the first year. After that, $99 annually.*
Avant® Cashback Rewards Mastercard®
Ongoing APR:35.99%*
Rewards:1% (cash back)
Annual Fee:$39*
Credit One Bank® Platinum X5 Visa® Metal Card
Ongoing APR:29.74% Variable
Rewards:1% - 5% (cash back)
Annual Fee:$95
First Progress Prestige Secured Mastercard® Cash Back Rewards
Ongoing APR:13.49% Variable
Rewards:1% - 10% (cash back)
Annual Fee:$49
First Progress Select Secured Mastercard® Cash Back Rewards
Ongoing APR:17.49% Variable
Rewards:1% - 10% (cash back)
Annual Fee:$39
Credit One Bank® Premier American Express® Credit Card
Ongoing APR:29.74% Variable
Rewards:1% (cash back)
Annual Fee:$39
Marriott Bonvoy Brilliant® American Express® Card
Intro bonus:Earn 200,000 Marriott Bonvoy® bonus points after you use your new Card to make $6,000 in purchases within the first 6 months of Card Membership. Offer Ends 5/13/2026.
Ongoing APR:19.49%-28.49% Variable
Rewards:2x - 6x (Points per dollar)
Annual Fee:$650
Discover it® Miles
Intro bonus:UNLIMITED BONUS: Unlimited Mile-for-Mile match for all new cardmembers. Discover gives you an unlimited match of all the Miles you’ve earned at the end of your first year. There’s no signing up, no minimum spending or maximum rewards. Just a Miles-for-Miles match. You could turn 35,000 Miles into 70,000 Miles.
Intro APR:0% intro APR for 15 months on Purchases and Balance Transfers
Ongoing APR:17.49% - 26.49% Variable APR
Rewards:1.5x (Miles per dollar)
Annual Fee:$0
Delta SkyMiles® Gold American Express Card
Intro bonus:Earn 70,000 Bonus Miles after you spend $3,000 in purchases with your new Card, and an additional 20,000 bonus miles after you make an additional $2,000 in purchases on the Card, both within your first 6 months. Ends 04/01/2026.
Ongoing APR:19.49%-28.49% Variable
Rewards:1x - 2x (Miles per dollar)
Annual Fee:$0 introductory annual fee for the first year, then $150.
Credit One Bank® Premier American Express® Unlimited Rewards Card
Ongoing APR:29.74% Variable
Rewards:1% (cash back)
Annual Fee:$0
Hilton Honors American Express Surpass® Card
Intro bonus:Earn 130,000 Bonus Points plus a Free Night Reward after you spend $3,000 in purchases on the Card in the first 6 months of Card Membership. Offer Ends 4/15/2026.
Ongoing APR:19.49%-28.49% Variable
Rewards:3x - 12x (Points per dollar)
Annual Fee:$150
Delta SkyMiles® Blue American Express Card
Intro bonus:Earn 10,000 bonus miles after you spend $1,000 in purchases on your new Card in your first 6 months.
Ongoing APR:19.49%-28.49% Variable
Rewards:1x - 2x (Miles per dollar)
Annual Fee:$0
One Key™ Card
Intro bonus:Limited Time Offer: Earn $300 in OneKeyCash™ after you spend $1,000 on purchases in the first 3 months. OneKeyCash is not redeemable for cash and can only be used on Expedia®, Hotels.com® and Vrbo®. To learn more, please refer to the One Key Terms and Conditions at www.expedia.com/one-key-terms.
Ongoing APR:18.49%, 23.49%, or 28.49% Variable APR
Rewards:1.5x - 3x (Points per dollar)
Annual Fee:$0
One Key+™ Card
Intro bonus:Earn $350 in OneKeyCash™ after you spend $3,000 on purchases in the first 3 months. OneKeyCash is not redeemable for cash and can only be used on Expedia®, Hotels.com® and Vrbo®. To learn more, please refer to the One Key Terms and Conditions at www.expedia.com/one-key-terms.
Ongoing APR:18.49%, 23.49%, or 28.49% Variable APR
Rewards:2x - 3x (Points per dollar)
Annual Fee:$99
Avant® Cashback Rewards Mastercard® - With A Higher Credit Limit
Ongoing APR:35.99%*
Rewards:1% (cash back)
Annual Fee:$125*
Avant® Cashback Rewards Mastercard®
Ongoing APR:35.99%*
Rewards:1% (cash back)
Annual Fee:$0*
See all our best rewards credit cards for 2026.
As a Safety Net
Plenty of unused credit means that you have a safety net if everything goes wrong at once—your car breaks down on your way to the airport, for example. The ability to put unexpected expenses on a card while you figure out how you are going to pay everything—whether transferring money from an emergency fund, temporarily putting less in savings or taking advantage of a 0% intro APR card—can give you some breathing room.
For Consumer Protections
If you used a credit card to buy an item that was never delivered or you received shoddy merchandise or service, you have recourse. You can request a chargeback, and the transaction will be investigated—and you will not have to pay the disputed amount while the investigation is underway.
To Save Time and Money
Check the fine print of your credit cards, and know what benefits may come with it. Some offer rental car insurance, price protection, fee-free foreign transactions, TSA Precheck and even concierge services.
To Budget or Track Spending
A credit card can help you figure out where your money is going—or where it went. Budgeting with a credit card isn't for everyone, and it will require regularly checking your spending online with an app. But if you are up to the challenge, it can help you maximize rewards and minimize interest. Another advantage of some cards: end-of-year expense tracking, by category.
The Worst Ways to Use a Credit Card
The worst way to use a credit card is on impulse purchases or to charge more than you can comfortably afford to pay back.
Maxing Out Your Credit Card
If you drive at speeds just below the speed limit, all is well. But if you charge up your credit card to just below the limit, that can be a problem. Those with the highest credit scores tend to use just a small portion of their credit limits.
Impulse Purchases
It's not so terrible to splurge occasionally, but the size of the splurge matters, particularly if you are putting it on a credit card. An impulse purchase of a cruise at sea or a new couch is quite different from a small indulgence.
Spending Above Your Means
If you use credit cards to pay because you really cannot afford to pay your regular expenses otherwise, that's a problem. A certified credit counselor can help you figure out what the problem is and how to address it. The solution may involve trimming expenses, increasing earnings and learning how to budget.
How Using a Credit Card Affects Your Credit
Using a credit card can help your credit standing if you:
- Pay on time every time: Payment history is the most important factor in your credit scores.
- Keep balances low: Using only a small portion—experts suggest less than 30%—of your credit card limits helps keep your credit utilization low. Credit utilization is one of the most important factors in your credit scores.
Scoring factors that are also affected, but not as much, are:
- How long you have had credit: Keeping cards open, unless you have a good reason to close them, like excessive fees, can be useful.
- Credit mix, which indicates your record using different kinds of credit: Credit mix considers your experience with different types of credit accounts such as installment loans, credit cards, mortgages and retail cards.
A credit card can damage your credit score if you pay more than 30 days late or carry high balances, but you can minimize the chances that will happen by:
- Setting up alerts: You can do this with your card issuer to let you know when your balances exceed a level you set.
- Making an additional payment or payments: Making several payments during the same billing period can help you keep your credit utilization low, especially if you routinely charge more than 30% of your credit limit(s).
- Setting up autopay: Paying at least the minimum amount due on time every month prevents late fees and credit score harm that can result from late payments.
The Bottom Line
Credit cards are like most tools: In the right hands, they can make your life easier and more convenient—but they also have the potential to be misused. They can help you build credit, offer consumer protections you wouldn't otherwise have and more.
If you want to use credit cards for a specific goal, whether it's to get on the credit radar or to find a card with stellar rewards, Experian's card comparison tool can help you find the card that best meets your needs.
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About the author
Bev O'Shea
Bev O'Shea is a Georgia-based freelance journalist specializing in personal finance and consumer credit. Most recently, she was a staff writer at personal finance website NerdWallet, where she was an authority on credit reports, credit scores and identity theft.
Read more from Bev