Question 1

Will using a credit card hurt my credit score?

Accepted Answer

Using a credit card responsibly can actually improve your credit score. Key factors that positively impact your score include making on-time payments, keeping balances low relative to your credit limits (ideally below 30%), and maintaining a long history with your accounts. Credit cards only hurt your score when you miss payments, carry high balances, apply for multiple cards in a short period, or close old accounts. When used properly, credit cards are one of the most effective tools for building a strong credit history.

Question 2

How many credit cards should I have?

Accepted Answer

There's no universal "right" number of credit cards—it depends on your financial habits and goals. For most people, 2-5 cards provide a good balance of benefits while remaining manageable. Having multiple cards can increase your total available credit (potentially improving your credit utilization ratio) and allow you to maximize different reward categories. However, only maintain as many cards as you can track and manage responsibly. If you find yourself forgetting payment due dates or struggling to monitor multiple accounts, it's better to have fewer cards.

Question 3

Is it better to pay the minimum payment or the full balance?

Accepted Answer

It's always better to pay your full statement balance by the due date if possible. Paying only the minimum has several disadvantages: you'll incur interest charges on the remaining balance, you'll stay in debt longer, and you'll end up paying significantly more for your purchases in the long run. For example, if you have a $3,000 balance on a card with 20% APR and make only minimum payments, it would take over 17 years to pay off and cost nearly $4,000 in interest. The minimum payment should only be used as a last resort when financial hardship prevents you from paying more.

Question 4

Do rewards credit cards really save you money?

Accepted Answer

Rewards credit cards can save you money, but only if you use them strategically and pay your balance in full each month. If you carry a balance and pay interest, the cost typically exceeds any rewards earned. For example, a card offering 2% cash back but charging 20% APR would result in a net loss if you carry a balance for more than one month. However, if you pay in full and avoid interest, rewards cards effectively discount everything you buy. For someone spending $25,000 annually on a 2% cash back card, that's $500 in rewards—a meaningful savings when the card is used responsibly.

Question 5

What should I do if I can't pay my credit card bill?

Accepted Answer

If you're unable to pay your credit card bill, take action immediately rather than ignoring the problem:1. Contact your card issuer to explain your situation and ask about hardship programs2. At minimum, make the minimum payment to avoid late fees and credit damage3. Prioritize high-interest debt if you have multiple cards4. Consider a balance transfer to a card with a 0% intro APR if your credit is still good5. Look into debt consolidation options like personal loans with lower interest rates6. Create a budget that allocates more money toward debt repayment7. In severe cases, consider credit counseling from a reputable non-profit organizationRemember that most issuers are willing to work with customers facing temporary financial difficulties, but you need to be proactive about communication.

Question 6

Are store credit cards worth getting?

Accepted Answer

Store credit cards can be worthwhile in specific circumstances, but they have significant limitations. On the positive side, they often offer substantial discounts on your first purchase (typically 10-25%), ongoing exclusive discounts, and special financing offers. They're also generally easier to qualify for than regular credit cards, making them an option for building credit.However, store cards typically have major drawbacks: much higher interest rates (often 25-30% APR), lower credit limits, limited usability (most can only be used at the specific retailer), and fewer consumer protections than major credit cards. They're only worth considering if you're a frequent shopper at that specific store, will pay the balance in full each month, and value the specific discounts offered. Otherwise, a general-purpose rewards card is usually a better choice.