Building credit is important for when you want to buy a house or a car. Having good credit will also offer you lower interest rates when you want to get another credit card or apply for a loan. However, if you’re new to having a credit card, it can be hard knowing what to buy with a credit card to build credit. On the flip side, you might also be wondering what items you should not purchase with a credit card when you’re starting out. For all these questions you may have, Elite Daily reached out to experts at Bank of America and Credit Karma for their advice.
Of course, the first thing you’re thinking when you get a credit card is probably not “what should I spend my credit card on to build credit?” Instead, you’re thinking of which cute ‘fits and must-have items for your home you need to add to your shopping cart. Or, if you’re worried about your payments, you may be too scared to break out your credit card when shopping. Credit Karma’s Chief People Officer, Colleen McCreary, tells Elite Daily, “People often assume that using credit cards will negatively impact their credit score. However, that’s not typically the case. In fact, in order to build credit, you have to prove you’re able to borrow responsibly and that typically starts with a credit card.”
When it comes to figuring out ways to use your credit card wisely, experts say there are some key things you can buy with a credit card to build credit and help you out in the future. You just need to know what those things are. For anyone wondering, “Should I use my credit card for everything,” here are some credit card tips that’ll help answer that for you.
While these are all great things to buy with your credit card to build credit when you’re first starting out, you may also want to use some of the tools provided to you by your bank for a more personal plan. Gaughan recommends Better Money Habits for any Bank of America users. It’s “a free financial education platform from Bank of America, available to everyone, that offers a wide range of financial tips and guidance — including building credit.”
Also as an additional tip for building credit, McCreary encourages anyone “to keep your credit utilization below 30%.” You don’t want to max out your card like you’re Cher in Clueless. Instead, use it when you need it and you’ll have a credit score that’s worth bragging about.