5 Tips for Getting the Most from Your Credit Card - Federal Reserve Board

Sep 21, 2026

A Federal Reserve Board guide providing five practical strategies to maximize credit card value and reduce costs. It emphasizes paying on time to avoid late fees and penalty interest, staying under the credit limit to prevent over-limit charges, and avoiding unnecessary fees tied to cash advances, balance transfers, returned payments, or phone payments. It also recommends paying more than the minimum to reduce interest and monitoring term changes through advance notices and monthly bills to adjust card use accordingly.

LanguageEnglish

CategoryHealthcare

FormatPDF

Pages1

Reading Time3 min

AccessFree to download

5 Tips for Getting the Most from Your Credit Card

Pay on time

Stay below your credit limit

Avoid unnecessary fees

Pay more than the minimum payment

Watch for changes in the terms of your account

The Federal Reserve Board 5 Tips forGetting the Most from Your Credit Card 1. Pay on time. Paying your credit card account on time helps you avoid late fees as well as penalty interest rates applied to your account, and helps you maintain a good credit record. A good credit record leads to a higher credit score, which helps you qualify for lower interest rates. Know the date your payment is due. If your bill is due at an inconvenient time of the month—for example, if it’s due on the 10th and you get paid on the 15th—contact your credit card company to see if they will change your billing cycle to fit your cash flow. 2. Stay below your credit limit. If you go over your credit limit on your card, your card issuer could charge a fee and increase your interest rate to a higher penalty rate. To avoid this, keep a record of your spending or check your balance online. Also, be aware that some merchants (for example, hotel and car rental companies) put a “hold” on your credit card based on their estimate of the amount you will charge. This can reduce your available credit until the final charge is processed. See “Credit and Debit Card Blocking”([www.ftc.gov/bcp/edu/pubs/con](www.ftc.gov/bcp/edu/pubs/con)sumer/credit/cre11.shtm) . 3. Avoid unnecessary fees. Credit card companies not only charge late payment and over-the-limit fees, but also fees for cash advances, transferring balances, and having a payment returned. Some companies charge a fee when you pay your bill by phone. Pay attention to the transactions that trigger these fees. If you need a cash advance, withdraw enough so that you don’t have to take a second cash advance—and incur a second fee—later in the month. Read your credit card agreement to learn more about the fees that your credit card company charges. For more information see “What are the fees?”(www. [federalreserve.gov/pubs/shop/default.htm\#fees2](federalreserve.gov/pubs/shop/default.htm#fees2)). 4. Pay more than the minimum payment. If you can’t pay your balance in full each month, try to pay as much of the total as you can. Over time, you’ll pay less in interest charges—money that you will be able to spend on other things, and you’ll pay off your balance sooner. See the Federal Reserve’s Credit Card Repayment Calculator ([www.federalreserve.gov/](www.federalreserve.gov/)[ ](www.federalreserve.gov/)creditcardcalculator) to determine possible repayment timelines. 5. Watch for changes in the terms of your account. Credit card companies can change the terms and conditions of your account. They will send you advance notices about changes in fees, interest rates, billing, and other features. By reading these “change in terms”notices, you can decide whether you want to change the way you use the card. For example, if cash advance fees increase, you may decide to use a different card for cash advances. If you have a card with a variable rate or if you have an introductory rate that is ending, be aware that credit card companies are not required to send you a notice about raising your interest rate. Interest rates are listed on your monthly bill. Read your bill carefully and take note of any changes. For more consumer information, please visit the Board of Governors of [the Federal Reserve System online at](the Federal Reserve System online at www.federalreserve.gov/consumerinfo)[ www.federalreserve.gov/consumerinfo](the Federal Reserve System online at www.federalreserve.gov/consumerinfo). 0409

FAQs

Why is paying your credit card on time important?

Paying on time helps avoid late fees and penalty interest rates, and supports a good credit record that can improve your credit score and help you qualify for lower interest rates.

What can happen if you exceed your credit limit?

Going over your credit limit may trigger an over-the-limit fee and increase your interest rate to a higher penalty rate.

How can you reduce interest charges if you can’t pay the full balance?

Pay as much of the total balance as you can rather than only the minimum payment to reduce interest over time and pay off your balance sooner.

Sep 21, 2026

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