By Megan Doyle | American Express Credit Intel Freelance Contributor
7 Min Read | October 1, 2021 in Cards
If you’re new to credit cards, you might be wondering how often you should use your card, what you should use it for, and what happens if you don’t use it.
The answers aren’t so simple: There are pros and cons to using your credit card for everything – or for nothing at all.
Regardless of how often you choose credit, you may want to consider using a credit card for certain purchases, like big-ticket items and travel.
A credit card can be an invaluable tool. It’s difficult to rent a car or hotel room without one, not to mention the benefits of rewards and building your credit history. But just because you have a credit card doesn’t mean you have to use it all the time. In fact, some people in America rarely use their credit cards. Others, however, use them for virtually all of their purchases – and still others fall somewhere in between. Like so many things in life, there’s no “right answer.”
Here are some of the pros and cons of using your cards for everything, what happens if you don’t use your credit card, and what you should always consider buying with a credit card.
Though you might run into some limitations if you’re trying to buy a money order or a gift card, it’s possible to use your credit card for just about any purchase. Here are the main advantages and drawbacks to using your credit card for all purchases.
The pros of using your credit card for everything:
The cons of using your credit card for everything:
The bottom line: Using your credit card for all purchases can be a great way to get rewards, boost your credit score, and enjoy benefits unique to credit cards – as long as you use your cards responsibly. The goal is to come out ahead, not fall behind.
Though there are people who use their credit cards for everything, many Americans like to use cash or debit cards.1 Avoiding your credit card isn’t necessarily a bad thing, but never using it can have consequences, too.
The pros of not using your credit card:
The cons of not using your credit card:
The bottom line: Avoiding your credit card probably won’t help you, unless you’re trying to lower your debt. But it also isn’t likely to hurt you, either – as long as you use it every once in a while. For example, consider using your card at least once a year or for a single, small recurring automated payment, like a streaming service.
No matter how you like to use your credit card, there are some things you may always want to consider purchasing with your credit card:
Additional FAQs About Using Credit Cards
Do unused credit cards hurt your credit score?
Generally speaking, no. But your credit score might be dinged if your card issuer closes your account due to inactivity.
Is it bad to use most of your credit limit?
It’s bad in the sense that using too much of your available credit can negatively impact your credit score.
How much credit should I use?
When possible, try not to use more than 30% of your available credit limit. Keeping your credit utilization ratio lower than 30% can have a positive impact on your credit score.
Do you get charged for not using a credit card?
Probably not, but you should check your credit card’s terms just to be sure. Of course, if your card has an annual fee, you are being charged for not using it!
How much you use your credit card is up to you, your needs, and your financial habits. Some people use their cards for everything, others for little or nothing, and either way can be fine. But as long as you avoid interest charges by paying on time, and in full, and keep your credit utilization low, using your credit card can help you earn rewards and boost your credit score.