Sometimes, the best strategies for maintaining good credit are the most straightforward ones.
Over 70% of cardholders prefer a simple credit card strategy, meaning they use the same one to two cards as much as possible, according to a 2019 CreditCards.com report that surveyed 2,569 adults, including 1,657 credit card holders.
"People like simplicity, and often in the form of cash back," says Ted Rossman, industry analyst for Creditcards.com. "You hear about these gamers who exploit every loophole and score first class tickets to the Maldives. That's great, but the fact is, it takes a lot of work, time, and effort."
And gaming may not be good for your bottom line. Opening too many new cards to get rewards and bonus points can damage your credit score and also lead to overspending.
If used responsibly, a credit card can help you build up your credit history and finance larger purchases over time. The less complicated your credit strategy is, the easier it is to manage your credit.
Here are three ways you can keep it simple and keep your credit strong.
Having multiple credit cards open in order to increase your available credit might seem like a good idea, but maintaining lots of lines of credit comes with risks. You don't want to open up too many credit cards and then end up having to cancel them because you're stuck with multiple annual fees and high interest rates.
Canceling cards can drag down your credit score and, ultimately, cost you money.
That's not all: Having multiple credit cards can put you at risk of overspending. One of the best ways to maintain good credit is to pay off your balance on time and in full each month. If you have multiple cards, that becomes harder to do. Plus you may have to contend with several different annual fees.
If you do decide you want to open a new card, take advantage of cashback incentives and rewards you'll actually use. Rather than trying to game the system and apply for every card that offers enticing incentives, be selective about the one card you choose.
A straightforward cash-back card is a great way to rack up rewards for your everyday purchases. Making sure your cash-back card rewards match up with your spending habits is a surefire way to maximize those returns, says Rossman.
Some of the simplest cash-back card programs offer a flat 1% to 2% cash-back rate on all spending. And tiered cash-back cards can boost rewards on select purchases: One may offer 6% cash-back on all purchases at gas stations and supermarkets, for example.
"Simplicity and rewards can actually go together," says Rossman. Consider "cards like the Citi Double Cash that give 2% back on everything, or even Apple Cards that have a simple rewards structure."
By sticking with a single card that maximizes your rewards, you can more easily manage your spending and payments. That, in turn, will help keep your credit in good standing.
Read more: Why it's time to pick a new credit card
Carrying a few lines of credit can benefit you in that it increases the overall age and credit available across all of your accounts. However, it's as important to make sure you're using each individual card responsibly.
Your credit utilization rate, or how much credit you're using compared to how much credit is available to you, is the second most important factor when determining your credit score.
"You shouldn't use more than 30%," says Matt Schulz, chief industry analyst at CompareCards.com. "That's when it starts impacting your credit score."
Your utilization score is a good indicator of how much of a risk you are to prospective lenders and how likely it is that you'll pay back any money you borrow, explains Rossman.
Overall, starting early and being selective about which credit cards you apply for, as well as cautious about how you use them, will help you establish a stronger credit history and give you the freedom to make larger purchases in the future.
Read more: 3 easy ways to boost your credit score
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