Carrying credit card debt can feel like a one-two punch lately.

First, there is inflation. With rising costs on everything from groceries to gas, everyone is feeling the pinch. In an attempt to slow that inflation, the Fed has issued several rate hikes, which raised credit card interest rates in turn to 18.91% on average. If you’re carrying a balance, you’re likely paying more up front and more later.

And many people are carrying credit card debt. The average credit card debt in the second quarter of 2022 was $8,942, according to a recent WalletHub study.

But that doesn’t mean you should shy away from credit cards. Used wisely, a credit card can be a great tool to help you build up your credit score and reach your financial goals.

Tip #1: Set a spending limit

Paying in cash has one big benefit: It makes it easier to really see what you’re spending. When you pay with your credit card, it can be all too easy to overspend and then only pay the minimum balance due at the end of the month.

To keep debt in check, set a monthly spending limit that you know you can comfortably afford to repay each month. And don’t forget to check your credit card balances regularly (much like you would with a debit card) to ensure you’re on track.

Tip #2: Pay your bill on time, every time

Your payment history accounts for 35% of your credit score. Paying at least the minimum amount on your credit card each month is a good way to build (or maintain) a good credit score.

Paying on time will also help you avoid getting slapped with fees. Many charge $25 or more for late fees.

To make hitting the deadline easier, sign up for auto pay as soon as you activate your credit card. But don’t forget to check to make sure the payment went through. You could be held liable (and charged) for any missed payments due to technical errors.

Tip #3: Pay your balance strategically

Under the Credit Card Accountability and Disclosure Act of 2009, credit card issuers must list how long it will take — and how much you’ll pay in interest overall — to pay off your credit card debt if you only make the minimum payment. By paying your balance in full each month, you’ll avoid interest charges, but if you do carry a balance, keep an eye on these disclosures.

Interest charges can add up quickly. If you can’t pay in full, aim to contribute as much as you can to pay down that balance.

Tip #4: Keep your utilization low

Beyond paying on time, your credit card balance also impacts your credit score. Most experts recommend keeping your credit utilization — how much debt you’re carrying compared to your available credit limit — under 30%. The closer you get to your credit card limit, the more your credit score can suffer, especially if you carry a balance month to month.

Tip #5: Consult a professional

Juggling multiple cards, promotional offers, balances, payment dates and other details can be overwhelming in any environment. If your debt is a significant source of stress, a debt counselor may be able to help. Members can speak with a debt counselor six days a week through our partner, Balance. The debt counselors will take time to understand your financial situation and design a goal-oriented action plan to help get you back on track.

Tip #6: Know your promotional details

When you sign up for a new credit card, don’t skip the fine print. Promos for low/no APR, waived fees or other cardholder benefits are attractive, but it can be easy to forget the specifics. When the promotional period ends, a variable APR can be an unwelcome surprise that is compounded by missed or late payments.

The upshot? Taking advantage of offers can be a savvy strategy to maximize credit card benefits. Just be sure to check your rates, read all of the details and keep tabs on when any intro period ends.

Bonus tip: Did you know that you can reduce your high-interest debt with a 0% interest credit card? It’s an option that may seem counterintuitive, but one worth considering. By consolidating your credit card debt in a zero-interest credit card, you can continue making on-time payments (and building your credit score) without the added sting of high interest rate charges. For a limited time, Spectrum CU is offering eligible members 0% intro APR for 18 billing cycles and no annual fee with the Visa® Platinum Card. Cardholders can also enjoy the convenience of mobile purchases, online account access and peace of mind with robust security measures.

For more savvy credit card strategies, register for our upcoming, live webinar presented by Balance on November 17, 2022. We hope to see you there!