Credit cards are popular but can lead to serious trouble if you aren't careful. A study released by MIT's Sloan School of Management found that people spend more when using credit cards than cash.

However, that doesn't mean you have to avoid credit cards entirely. If you’re disciplined with how you use your card, you can earn valuable benefits and rewards without building debt. Learn how to use a credit card responsibly to minimize interest and maintain a strong credit score.

6 tips for using a credit card responsibly

Credit cards make it easy to spend money. You can swipe your card at the register or make contactless payments to complete transactions without thinking twice.

Considering how simple credit cards make it to spend, it's no surprise that credit card debt is up; Experian reported that the average credit card balance was $6,501 in 2023, a 10% increase from the previous year.

To prevent debt from accruing, follow these six tips:

1. Set up autopay

Your payment history — or how often you make your required payments on time — is the most significant factor affecting your credit. According to the FICO credit scoring model, the most commonly used credit score is your payment history, which determines 35% of your credit score.

One of the easiest to ensure you never miss a payment is to sign up for autopay. With credit cards, you can enroll in monthly automatic payments for the minimum required amount, your full balance, or a flat payment amount of your choosing.

2. Keep your balance low

Your credit utilization, or how much of your available credit you use, makes up 30% of your credit score. The lower your balance, the better off you'll be. According to FICO, keeping your credit utilization below 10% will significantly benefit your credit.

For example, let's say you have three credit cards:

• Card #1 has a credit limit of $5,000

• Card #2 has a credit limit of $2,500

• Card #3 has a credit limit of $2,000

Your combined credit limit is $9,500; to follow FICO's recommendation, keep your total credit card balance under $950 for the best possible credit score.

3. Review your statement monthly

It's easy to overlook those statements that come in, but reviewing your credit card statements at least once a month can prevent major problems.

Credit card theft is common, so examining your statement will help you catch unauthorized transactions. Thieves may test stolen cards by making small charges to determine whether they're active, so relatively small expenses — such as $10 or less — can be a red flag.

If you find unauthorized charges, dispute them with your credit card company immediately by calling the number on the back of your card. If you report unauthorized charges after using the card, your liability is limited to $50.

4. Pay more than the minimum

When you receive your credit card statement, it will show you the minimum payment amount — often 2% to 4% of the current balance — and how long it will take to pay off your existing balance. Depending on your balance, it can take years to pay off your credit card if you only pay the minimum, and you'll pay significantly more interest.

For example, say you charged $3,000 on a credit card with an annual percentage rate (APR) of 22.75% — the average rate for credit cards that assessed interest as of November 2023, the last available data. Your credit card issuer requires a minimum payment of 3% of your balance, so your required payment is $90 per month.

If you only pay the minimum, it will take you 52 months to pay off your debt, and you'll pay a total of $4,678.83 — interest charges added over $1,600 to your repayment cost. However, increasing your payment amount by as little as $25 per month can make a big difference; you'll pay off your debt much sooner and save hundreds in interest.

Below is how much you'd save if you increased your payments by $25 or $50 per month:

If you can, aim to pay off the full statement balance each month within the card's grace period — the time between the end of the billing cycle and the date your minimum payment is due. If you pay off the balance during that period, no interest will accrue, and you can still earn rewards on your purchases.

5. Know your rates and terms

Many people are shocked by how high credit card APRs can be. While some forms of debt, like student loans and mortgages, typically have single-digit APRs, credit card APRs are usually 20% or higher.

Cards also have more than one APR; you may have a different purchase rate than you do for cash advances or balance transfers. Knowing what APR applies and when can help you prioritize your payments to minimize interest.

You can view your card's rates and terms by reviewing your monthly statement.

6. Stick to a budget

As mentioned previously, research has found that people tend to spend more using credit cards than cash. To prevent racking up debt and overspending, create a budget and track your credit card use. You can track your spending manually by reviewing your accounts or keeping a spreadsheet, or you can use budgeting apps to do it for you.

Managing your credit cards wisely

Credit cards are an easy way to pay for your purchases, and learning how to use a credit card responsibly can prevent you from exceeding your budget and accruing debt. As you use your credit card, keeping your balances low and paying off your statement balance in full will boost your credit.

And by always paying off the statement balance by the end of the grace period, you can earn credit card airline miles, points, or cash back without paying interest charges on your purchases.

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