Posted on: Oct 13, 2015

Credit cards can make you save money thanks to points, cashback and all sorts of rewards.

However, make sure to follow these 5 golden rules when you use them.

.1.

DON’T SPEND MORE THAN YOU EARN

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Set up a budget and stick to it. If you can pay your balance in full every month, you will get a prime credit score within a few months.

.2.

MAINTAIN YOUR CREDIT UTILIZATION RATE BELOW 30%

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The goal is to show credit bureaus that you don’t use too much of your credit lines. Keep your credit utilization rate below 30% and ideally 10%.

.3.

GET NEW CREDIT CARDS ON A REGULAR BASIS

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This is a competitive business. You can get access to new offers that are lucrative and you will be able to increase your credit line available. You should consider working with different credit card issuers (Chase, American Express, Citi, Bank of America,…)

.4.

KEEP OLD CREDIT CARDS OPEN

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There is no point in closing old credit cards. Length of credit is a factor for your credit score and you need to improve your average length. If there is a annual fee, you should downgrade for a fee free credit card.

.5.

OPEN FREQUENT FLYER PROGRAMS WITH THE AIRLINES YOU USE

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When you are able to get enough rewards you can transfer these points to the airlines you prefer. 3 type of points that are really helpful: Chase Ultimate Rewards, Starwood Points and Amex Membership Rewards.

Editorial Note: Opinions expressed here are author’s alone, not those of any bank, credit card issuer, hotel, airline, or other entity. This content has not been reviewed, approved or otherwise endorsed by any of the entities included within the post.