A woman paying with a credit card.

How to make the most of your credit card.

Remember when you got the keys to your first car, and the feelings of independence that came with it? While it may not sound as exciting, getting a credit card is also an important event for your financial future. A credit card can be the first step to building your credit, so you can buy your next car or first house. There are plenty of different credit cards to choose from, and the key is finding the right one for you. Here are four ways to make the most of your credit card while managing your money responsibly.

Use a rewards card that gives you the best value.

Most credit cards offer some type of rewards program that offers you a percentage of your purchases as an incentive. This value will vary depending on the rewards card. Credit cards usually offer either a flat percentage on your purchases or a tiered structure that gives you more value on certain purchases. For instance, you may earn 2% on gas, while other purchases may get you 1%.

Different rewards programs may allow you to redeem your points for things like merchandise, gift cards, and travel, but cash back cards usually offer the best value. The key is to figure out what rewards might suit your lifestyle best, like if you travel a lot for work and can earn more points that way.

Whatever program you choose, you should use your card for purchases that you can pay off each month. If you are carrying a balance from month to month, the benefit of earning rewards will go away with the interest charges you’ll have to pay.

Keep track of your spending often.
Don’t wait until you receive your monthly statement to see how much you’ve spent. Luckily, technology has made it easy to keep track of your spending. Most banks allow you to login to your account online or download a mobile app to review your purchases. Be sure that you are logging in every couple of days or at least once a week.

It may also help to put a self-imposed limit on how much you spend every month. Once you have reached that limit, take the card out of your wallet or purse to keep you from using it until next month. If you find that you are having trouble with over-spending, consider calling the bank and asking them to lower your credit limit.

Pay your balance every month and on time.
You will want to make sure you are paying your full balance by the due date. Late fees and interest charges can add up quickly. Only use your card for purchases that you know you can pay off to avoid a revolving balance. If you’re having trouble remembering when your bill is due, sign up for automatic payments.

Banks are required to report your payment behavior to credit reporting bureaus. When you pay on time each month, it helps you build credit and maintain a good credit score. A strong credit score will come in handy later when you apply for an apartment, car loan or mortgage. To learn more about your credit report, consider reading “Why it’s a good idea to check your credit report each year.

Use alerts to keep your account secure.
Most banks also offer card alerts that can notify you via text or email when certain events occur. You can receive card alerts to monitor activities like when your card is used to make a purchase online, over the phone or by mail. There are also card alerts that may be available to help you manage your credit card, such as notifications for when your payment is almost due or if you have reached a certain balance you designate.

Being responsible with your credit card may take a little extra effort, but the rewards are worth it. Besides earning rewards, you can develop a good credit history that will enable major life events like purchasing a new home down the road.

If you’re looking for a credit card with a solid rewards program that offers cash back, Commerce has several options for you. Visit our website or speak with a personal banker at a branch near you.

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