Don’t Let a Credit Card Scare You

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Credit cards can be great resources when used responsibly. While tempting to use for a shopping spree, credit cards can actually help improve your financial standing if you know how they work and how to use them. Below, we’ve listed some credit card fears and how you can avoid them.

Credit Cards Mean Debt

That could be true, but it’s up to you. Credit cards are loans, which means there is potential to accrue debt. If using a credit card, make sure you only spend what you can afford. Then you can pay your credit card balance in full when you receive the bill each month, preventing you from racking up debt.

Credit Cards Cost Money

Credit cards do have interest rates, but there is a way to avoid paying interest. Let’s say you buy groceries and gas with your credit card, which is added to your monthly bill or statement. The statement details how much you owe and your due date, which is usually about 30 days later. As long as you pay the total statement balance before your due date, you won’t pay any interest.

If you can’t pay the full balance, that’s okay. The statement also lists a minimum payment. Instead of paying the entire $200 balance, you pay the $50 minimum payment. If either amount is paid on time, your credit card will remain in good standing. However, interest is charged on the remaining unpaid balance.

Credit Cards Damage Credit Scores

If you’re paying off your credit card balance in full each month, you can actually improve your credit score. To establish a good credit score, you’ll need credit history showing that you use credit responsibly. Because credit cards stay open, you’ll continue to build history year after year. When first starting to establish credit, this is a great way to build positive history.

A credit card can serve many purposes: some positive and some negative. It all depends on how you use it. With these tips, you won’t need to worry over your credit card and can use it to your financial advantage.


Deidre Davis is the Vice President of Marketing and Communications at MSU Federal Credit Union. MSUFCU’s headquarters are at 3777 West Road East Lansing, MI 48823. Contact Deidre at or (517) 664-7877.


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