Although it may seem that credit cards only harm your credit score, they can help your score if you use them to your advantage. If you have bad credit, applying for a new credit card may seem like the last addition you need to your wallet; however, this new card is a new opportunity for better financial health.
If you are responsible with your credit by paying bills on time and never reaching your limit each month, credit cards will improve your score over time. Make sure to check your limits with any card you have because reaching or overcharging your limits each month will do more harm than good to your credit. Always keep in mind that if you spend more than 30% of your “credit utilization ratio,” or how close you are to reaching your credit limit, this spending will present a red flag to credit companies even if you pay every cent off. Try to only use only about 10% to improve your credit score. Finally, if you find that you have swiped your credit card a few too many times due to emergencies or expenses, try to pay the bill twice this month. If you spend a large majority of your credit utilization ratio before the end of the month but intend to pay off every dime, break up the payments to twice in one month for your account and credit score to still look great.
Always remember to use your credit cards effectively and wisely to help you gain a credit advantage because a few wrong moves can take your good credit intentions down the wrong path.