Here are some useful tips to help you manage your credit:

Pay on time.

If you pay on time, you build good credit and avoid expensive late fees. If you pay your bill as soon as you get it, you’ll also avoid high interest rates. Some companies charge a higher interest rate when you pay late, on top of late fees that can be $35 or more!

Pay off your balance in full every month.

If you can’t, pay at least half. If you only pay the minimum, you’ll always pay back much more than you borrowed. If you can never pay off what you’ve charged, you’re not sticking to your budget.

Know your terms

“Teaser” rates are low rates offered to new customers. You'll often be offered a teaser rate for balance transfers. If you get an offer for 0% rate in the mail, look it over closely—the 0% rate will expire in a few months. After that, what’s the interest rate you’ll be charged? What’s the interest rate you’ll pay on new purchases (is it higher or lower than the rate you’re paying today)? For more information, see Balance Transfer.

Read the fine print

It’s not always fun, but it will save you money. If you see a sentence that reads “0% interest rate!!*” make sure you read the fine print next to the (*). If you don’t understand it, call the company to have them explain it. You don’t want any surprises, and if you don’t understand the card, you may end up surprised.

Check your monthly statement.

Look at the APR and the fees. Review all the purchases. If something shows up that looks unfamiliar, call your credit card company immediately. The credit card company generally is responsible for any unauthorized charges on your account.

Shop for the best deal on a credit card.

Credit card offers must summarize all the fees and interest they charge in a summary chart of key terms. It might be tedious, but take the time to compare and find the one that’s best for you. You want a low interest rate – the higher the rate, the more you pay. Also check the fees: over-the-limit, ATM withdrawals, missed payments. Over-the-limit fees alone can cost as much as $35. See Guide to Choosing Credit Cards for more advice on choosing a card.

Annual fees can be worth it, but only if you get something in return

Only pay an annual fee if you’re getting something worthwhile, like airline miles, cash back, or store discounts. If you are getting rewards, make sure you’ll use the card enough to make the rewards worthwhile.

Maintain a low “Debt-to-Income Ratio.”

The higher your income, the higher your debt can be without causing you to become overextended. If you apply for a car or home loan, lenders look at your debt-to-income ratio to see if you can pay your bills and have money left every month.

Don’t apply for too many loans or credit cards.

This information will show up on your credit report and will lower your credit score. If you have too many loans, you’re probably only paying the minimum and never paying them off.