How to use a credit card

How to use a credit card

author: Bryony Pearce

By Bryony Pearce

Whether you’re a seasoned credit card user or you’re new to the market we’ve got the A to Z of how to use your card for the better.

Credit cards can be complicated pieces of plastic at times. So, to simplify them, we’ve broken down exactly how you should use them responsibly.

What is the best way to use a credit card?

If you use your credit card irresponsibly it can become a pricey and never-ending spiral of debt. To avoid just that, follow these simple, proven practices:

  • Keep track of your spending so you only purchase what you can afford to repay.
  • Pay your bills on time and in full to avoid fees, extra interest charges, and damaging your credit score.
  • Try to pay more than the minimum payment to reduce the amount of interest you rack up.
  • Set a sensible limit in advance to prevent over-the-top spending splurges.
  • Don’t use your credit card to make ends meet - it’s not a long-term solution.
  • Don’t increase your credit limit if you don’t think you can keep on top of your finances.

How to use a credit card to build credit

Start by setting up a Standing Order to make payments each month, preferably a week before its due to give it a few days to clear before the due date. It’s best to pay more than the minimum payment to clear any interest incurred and some of the balance. If possible, it's best to try and clear the full balance on time and in full each month to help increase your credit score. By setting up a Standing Order each month this will help eliminate the risk of accidentally missing a payment and impacting your credit history as a result.

The second way to build credit with your credit card is by keeping an eye on your credit utilisation ratio. While lenders don’t like to see you’ve regularly hit your credit limit, they also don’t like to see you not using your available balance.

How do you pay with a credit card?


If you’re paying in-store with a credit card you’ve got the option of either using chip and PIN or contactless (if available as some credit card providers do not have contactless). With the former,  you’ll be asked for the card’s four-digit code to authorise the transaction.

You can only use contactless to pay for purchases that are £100 or less and to process the payment all you need to do is hold your card up against the terminal.


Before buying something online with your card make sure the site’s reputable and secure (i.e. their address starts with HTTPS, not HTTP).

You can either pay online with your credit card directly by supplying the retailer with your 16-digit card number, expiry date, and security code. If a site asks you for your account number and sort code, and it's not being used to set up a Direct Debit, think twice. 

Or, if your credit card’s attached to your PayPal and the website facilitates PayPal payments, you can complete the purchase by logging into your account.

How can I avoid interest on my credit card?

If you clear your credit card balance on time and in full each month you may not have to pay a single penny in interest. To ensure you’re able to do this, keep track of your spending and only put on your credit card what you know you can comfortably afford to repay each month.

As an added bonus, this will also keep you clear of unwanted late payment fees and being marked down on your credit report, potentially impacting you in the future when applying for credit. 

Not got the funds to wipe your balance? Not a problem. You could transfer your debt to a 0% balance transfer card to help pay off the balance, whist you do not pay anything off in interest. It could be worth finding out more about balance transfer cards, but, it's worth remembering that 0% is for a limited time only so make sure you pay off the balance within the interest-free period, otherwise you will start to repay interest on the remaining balance. 

How much should I use my credit card?

Using your credit card often enough and repaying the balance on time each month is important to ensure a) it remains active, and b) your provider continues reporting your repayment history to the credit reference agencies.

This allows you to keep on top of your spending, make your repayments on time and in full each month and will demonstrate that you’re a reliable and responsible borrower.

Also, every payment you meet on time and in full earns you a green tick on your credit report. The more ticks you get the better credit score you’ll have which could go a long way in improving your credit score.

Disclaimer: We make every effort to ensure that content is correct at the time of publication. Please note that information published on this website does not constitute financial advice, and we aren’t responsible for the content of any external sites.

How to use a credit card How to use a credit card