7 Habits of Highly Effective Credit Card Users

You try to rake in big credit card rewards, avoid paying interest and keep your spending under control, but it feels like you’re running on a hamster wheel. What gives?

The answer likely has to do with your habits, or actions you take automatically without much thought. When implementing the wrong habits, putting in more effort only gets you to the wrong place faster, according to Stephen R. Covey’s best-selling book, “The 7 Habits of Highly Effective People.”

To get to the right place with your credit cards, adopt these seven habits of highly effective cardholders.

1. Paying in full, on time

For David Rae, paying credit card bills in full and on time is just part of the drill.

“I’m probably the worst customer for the credit card companies because I maximize the value from my rewards and points, and minimize what I pay for them,” says Rae, a certified financial planner at DRM Wealth Management in Los Angeles. He and his husband are flying first class to Europe soon using points and miles, he says.

By paying on time and in full every month, you avoid interest and late-payment penalties. If you dread cutting that big check, try making multiple payments throughout the month. Trouble with deadlines? Set up autopay, assuming you won’t risk an overdraft.

2. Optimizing rewards with just a few cards

Using two or three credit cards can certainly deliver more value than using just one. But splitting purchases among a dozen cards brings diminishing returns and creates an organizational nightmare.

If your wallet is overcrowded, identify the few cards that bring you the most value and concentrate your spending in those accounts.

3. Sticking to a budget

Budgeting doesn’t require Herculean effort when it’s part of your routine.

“We’ve been tracking our budget since we started college, really,” says Kelan Kline, who runs the personal finance blog The Savvy Couple with his wife, Brittany Kline.The Rochester, New York, couple always pay their cards in full. “Usually, once a week, we’ll kind of go through and just make sure we’re hitting our budget for the month.”

Pair your weekly budget check-in with another weekly activity such as grocery shopping. As you do these tasks side by side repeatedly, budgeting becomes a habit.

4. Staying well below credit limits

To keep your credit scores in shape, use less than 30% of the limit on every card. The lower your balances, the more your scores will benefit.

Download your issuer’s smartphone app to more easily track your spending. Check your balance when you have some time to kill and make an extra payment if it creeps too high.

5. Watching for better offers

If you don’t pay attention to new credit card offers, you might end up using a lackluster card for too long.

Get in the practice of thinking comparatively. When you hear about a credit card offer — on TV, online or by mail — measure it against your current card. If the offer is rich enough, pounce. To help your credit score, keep your old card open and use it on occasion, provided it doesn’t charge an annual fee.

6. Monitoring accounts

When your credit card statement comes, don’t just pay it — read it. Otherwise, you could miss billing errors, fraudulent charges or other problems.

“For me, once to three times a year, there’s something funny on [my credit card statements],” says Clint Haynes, a certified financial planner at NexGen Wealth in Lee’s Summit, Missouri. “If I didn’t go through my transactions … I would never know about it.”

Stay on top of your account by signing up for spending push notifications from your issuer.

7. Bouncing back from mistakes

Making a credit card goof — missing a payment or spending too much — might make you feel like curling up under the nearest rock. But it can also be an opportunity to grow.