For many of us, borrowing money and paying on credit are ways to help us achieve important goals. Credit might be what makes renovating a home or purchasing a reliable vehicle possible. 

Using credit also helps you manage day-to-day transactions like renting a car or purchasing airline tickets online—two things that require you to use a credit card. 

Many credit cards also offer rewards on items you are already spending on, like groceries, gas, and travel. 

Credit is a powerful tool. Let’s explore how to choose the right product, make empowered decisions and manage your payments confidently. 

Why use a credit card? 

Credit cards are a convenient way to pay, whether that’s in person or online. A credit card is also an easy way to help build your credit score. Making timely payments, never skipping a payment and keeping a low balance can boost your credit rating. If you choose a rewards card, the points you earn can be used for things like free travelling, choosing merchandise, adding funds to savings, or paying down loans or mortgages.

If saving up isn’t your focus, there are cash back rewards programs that’ll offer customers  a credit to their account.

 
Tips for managing your credit cards

With credit cards, ensuring you make your monthly minimum payment is the best way to not negatively impact your credit score. If you choose, you can pay off your card multiple times a month. There is no negative impact to your credit score and you are able to maximize your credit card rewards. The limit on your credit card will probably vary, depending on your income level, personal or family budget, and stage of life. Choose the limit that works for you. 

Why use a line of credit?

For larger purchases that you may need more time to repay, a line of credit (LOC) is a good, lower-cost option. 

Like a credit card, a line of credit is very flexible in terms of repayments, allowing you to pay as much as you want, whenever you want, as long as you meet a minimum monthly payment. With the lower interest rate, carrying a larger balance won’t impact your budget as much

What to consider with a line of credit 

As with any revolving credit (a line of credit that remains available over time, even if you pay the full balance), it’s important to be conscious of your spending. Have a plan for how you will pay it back—on what day of the month and how much.

With most online banking services, you can set up automatic payments or transfers to a LOC. This way you know you’re always making regular payments. You’ll then be able to re-adjust your discretionary spending habits to fit within the funds you have left available each month. 

Get help managing your credit

Credit is a valuable tool, but managing how much you use and how frequently you make payments is crucial. 

If you think you need more guidance managing your credit balances, your ATB personal banking specialist is the person to get in touch with. They’ll get you started with a personalized and manageable plan to pay off your debt and improve your financial situation.