Being in debt can seriously knock you off course as you work to reach your financial goals. It’s therefore really important to minimise and avoid racking up avoidable debt wherever possible, such as with your credit card. It’s all too easy to flash the plastic and not think about what it’s costing you in the long run. But that can be expensive in more ways than one, so here are ten ways in which you can make sure you’re using your credit card wisely.

1. Set clear goals

If you’re thinking about applying for a credit card, decide what you actually want it for. Are you interested in building credit? Or do you need a safety net to help you manage unexpected expenses? If you have a clear purpose in mind, that will help you decide how and when you use your credit card.

2. Pick the right card for you

Knowing what you want a credit card for will also help you pick the right one. For example, a card with a lower credit limit and no annual fees could be the best option if your priority is to build credit. Alternatively, a card with travel rewards might be more suitable if you’re regularly trekking across the world.

3. Spend responsibly

A credit card isn’t free money, so don’t treat it as a bottomless pot of cash. Instead, limit your spending to what you know you can afford to pay off when your credit card statement drops through the letterbox.

4. Set a realistic budget

Setting and sticking to a budget helps you cover all your day-to-day expenses and work towards your financial goals. Make sure your credit card spending falls within this budget, so your monthly repayments are accounted for.

5. Pay your balance in full every month

Make sure you pay off your balance in full every month. This can help you build a positive credit score and means you don’t have to pay extra amounts in interest.

6. Take advantage of rewards

If your credit card offers rewards such as cashback, travel points or discounts, use them to your advantage. But remember to stay disciplined, as you don’t want to be overspending just to access certain rewards.

7. Monitor your spending

Look at your credit card statements to see how and where you’re spending your money. If you do this, you’ll be able to see if you’re spending too much in certain areas and change your habits where necessary.

8. Pay off high-interest debts first

If you have multiple debts and more than one credit card, paying off those with higher interest charges should be your priority. Paying down high-interest debts first ultimately means you’ll pay less in the long run, so you’ll be able to free up cash to invest or save elsewhere.

9. Don’t be caught out by changing terms

When you apply for a credit card, you might be offered introductory rates and bonuses. However, these will be time-limited, so make sure you know the expiry dates of such offers, so you’re not surprised by a sudden increase in costs.

10. Create an emergency fund

If you’re hit with an unexpected expense, you might be tempted to use your credit card to cover these costs. But this can lead to you falling into considerable debt, so it’s better to have an emergency fund in place that you can access if the worst happens. With a credit card, you can reap many benefits, such as a favourable credit score, rewards such as cashback and an extra layer of protection when you’re making a transaction. But these depend on you using your credit card wisely and prudently, so think about how you use it and you’ll soon see the advantages.