7 things credit experts never do with their credit cards

There’s no shortage of personal finance experts telling people what to do with their credit cards.

But what about the things you shouldn’t do? Sometimes the things you don’t do can make just as much of a difference, if not more.

I decided to find out. I asked three experts in credit and personal finance about things they never do with their cards. As it turned out, they have quite a few rules — and to be honest, I’ve broken some of them.

Without further ado, here’s what three experts avoid with their credit cards, and what to do if you find these guidelines a little too rigid.

Beverly Harzog: Mind the interest and fees

Beverly Harzog is a nationally recognized consumer credit expert and podcast host of Your Personal Economy. She’s also the bestselling and award-winning author of five personal finance books.

When it comes to her credit cards, Harzog focuses on healthy credit habits, including avoiding interest and fees. Here are some things she never does with her cards.

Get a cash advance

Did you know you can get cash from your credit card? However, simply because you can doesn’t mean you should. Harzog never does as cash advances don’t have a grace period during which you can pay off the card without accruing interest.

“When you get a cash advance, you’re going to pay compound interest, and it starts right away,” Harzog explains. “There’s also a transaction fee anywhere from 3 to 5 percent.”

To make it even worse, the cash advance APR is typically higher than your regular purchase APR. All of that together makes it a rather expensive transaction.

“I advise only getting cash advance if it’s a dire emergency,” Harzog says. “There’s always a better option. If you really need to borrow money, consider a personal loan.”

With a personal loan, you can borrow cash at a potentially lower rate and pay it off in fixed installments. It’s still important to have a plan to pay it off, but unlike a cash advance with its compound interest, it can be less likely to snowball.

Use a credit card as an emergency fund

An emergency fund is the money you can use in unexpected situations, such as car troubles or urgent home repairs. It belongs in a high-yield savings account. Using your credit card for such expenses can lead to creeping credit card debt. In fact, Harzog says she’s very strict about it — again, due to the compound interest that cards charge.

That said, she does have what she refers to as her “emergency card” which comes with a low interest rate. “It’s 9.99 percent, believe it or not, it’s a fixed rate,” Harzog says. “I’ve had this card for 25 years. If I had to float a balance for one or two months, that is the card I would use.”

When an emergency strikes and your emergency fund isn’t up to the task — or you haven’t built one yet — you need a solid plan before you reach for your credit card.

“Let’s say you need a new roof and it’s going to cost you $12,000,” Harzog says. “Don’t put that on your credit card unless you’ve got a low interest card and you can pay it off within two months.”

A zero-interest credit card is another option if you need more time. With this type of card, you can take advantage of an intro period during which you won’t be charged interest on purchases. This period can be longer than a year and even close to two years. This allows you plenty of time to pay off the debt, but again, you’ll need discipline and a repayment plan you can stick to.

If you do decide to charge a large sum to a credit card you already have, make sure you know your APR. And if you have multiple cards, compare interest rates to go with the lowest one.

Rod Griffin: Skip the impulse purchase, and the interest

Rod Griffin is a senior director of consumer education and advocacy for Experian, one of the three major credit bureaus. He leads Experian’s national consumer education programs and outreach. Griffin frequently speaks on topics like credit reporting, credit scoring and identity theft.

In his credit card usage, Griffin puts emphasis on discipline and planning. That requires some hard lines and a good dose of self-awareness. With that, here are some things Griffin never does.

Use his cards for impulse purchases

Credit cards and impulse shopping have always been a risky combo. If you’re not careful, using your credit cards too frequently for impulse purchases “will get you into debt difficulty in a hurry,” Griffin says.

To resist temptation, Griffin’s strategy is to “walk away and take a day” before making a purchase. If you see something you want to buy without having planned for it, instead of telling yourself no, take the time to think. You may very well find the urge to buy is gone or forget about it altogether. If it takes more than a day to decide if the urge justifies the purchase, don’t hesitate to give yourself another day, or even a week or a month.

I employ the same strategy myself. Since my brain likes to hyperfocus on things, I give myself a longer “waiting” period. If I still want something after a week, I suppose I really want it. Then I can see where it fits in my budget and whether I want to save for it or cut some other expenses for the month. (Unfortunately, I’m still an imperfect human. All that logic goes out the window once I find myself in a bookstore.)

Of course, none of this is easy and might require an attitude shift. Griffin, for example, is strict about distinguishing his wants and needs and teaches his kids the same. Such an approach involves a certain level of honesty with yourself and, Griffin admits, “is really the hardest thing to do.”

“My needs list is very, very, very short,” he says. “My wants list is very, very long. But you know, you learn to distinguish those things.”

Pay interest on a credit card

Griffin also pays no credit card interest. By never carrying a balance from month to month, he simply has no interest to pay to begin with.

“You always pay the balance in full each month,” he says. “If you do that, it’s not going to cost you in terms of interest use, almost like a cash transaction.”

Most card issuers only charge interest on the balance you haven’t paid off by the due date. That means if you pay your card in full each month, you don’t have to worry about APR. One quick note: Keep an eye out for the rare card — often marketed to people with poor credit — that doesn’t offer a grace period on your purchases and avoid these cards at all costs.

Additionally, paying your balance in full is great news for your credit.

“It’s going to help your credit scores and your credit history, which is going to help you qualify for other types of credit at lower rates [and] better terms,” Griffin says.

This is because credit utilization ratio, or how much of your available credit you’re using, is an important credit score factor. The less of your credit line you’re using, the better for your scores.

Bobbi Rebell: Count and keep your accounts

Bobbi Rebell is a certified financial planner and the founder and CEO of Financial Wellness Strategies, a provider of financial literacy education benefits to companies and their employees. She is also the author of two personal finance books.

Rebell sees credit cards as an important part of our financial system. She strives to use them in a way that boosts financial wellness and minimizes anxiety. Here are things she never does.

Open too many credit cards

How many cards is too many? More than you can keep track of. Rebell avoids this unnecessary stress by not hunting card bonuses.

“I don’t chase those mileage bonus offers,” she says. “I have only one credit card that carries an annual fee and I use the perks frequently. I stop at that. This is a lifestyle and mindset choice.”

Of course, the right number of cards differs from person to person. Some people spend enough to justify having a dozen or more cards. Others are travel junkies proficient in (and excited about) racking up points and miles using every avenue possible. Other cardholders are perfectly happy with one or two cards.

“For me, I find having a long list of credit cards to keep track of creates financial anxiety,” Rebell says. “Some people enjoy tracking and maximizing points and perks on their credit cards. It’s just not the best use of my time and attention.”

Indeed, credit card rewards can be frustrating. I recently reported on the Consumer Financial Protection Bureau’s findings that many people are annoyed with their card rewards. Fine print can be confusing. Points and miles can lose value. Unhelpful customer service agents exist. The best way to avoid all this is to know all your cards intimately. If you begin to lose track of the terms and rewards systems, it might be a sign you have too many cards.

Close an account

We’ve already touched on credit utilization. With more credit available to you, it’s easier to keep the ratio low. Closing a credit card account, on the other hand, lowers your available credit and can lead to increased utilization.

For that reason, Rebell avoids canceling credit cards. Even if a card doesn’t work for you anymore, it’s often possible to upgrade or downgrade to something that will. You’ll have a new card but keep the same account and credit limit.

If you cancel an old card, it can also impact the average age of your accounts, which is another credit score factor. That impact might not be immediate: closed accounts in good standing stay on your credit reports for 10 years. Still, this is something to keep in mind when it comes to your oldest accounts.

If you have a no-annual-fee card you got many years ago but aren’t using anymore, consider putting a small recurring charge on it to keep it active. Set up autopay to ensure it’s always paid off. This way, you’re keeping your oldest card without much maintenance, and the issuer is less likely to be tempted to close the account due to inactivity.

Of course, closing an account is still inevitable at times.

“While I have not personally had this experience, there are times that you might consider closing a credit card, including closing a shared credit card after separation or divorce, or if you are paying a high annual fee and are not using the benefits associated with paying that fee,” Rebell says.

I recently canceled a card, too. I wasn’t getting enough value for the annual fee and had no good option for a downgrade. I avoid closing credit cards like many credit experts out there, so I didn’t enjoy having to make such a decision. But at the end of the day, that was best for my wallet, and that’s what matters.

Never say never?

To close out the list, I’d like to add something from my own experience. Over the last five years, I’ve written and read about the best credit card practices and common mistakes. They’re important to know and implement for the sake of your financial health.

That said, it’s just as important to give yourself a bit of grace. Common mistakes are common for a reason. For instance, everyone will tell you to stay away from credit card debt — and you most likely know it’s not great to have. Yet, more than 2 in 5 credit cardholders (44 percent) carry a balance month to month, according to a Bankrate survey published in March. Many find themselves in this situation because of unexpected expenses. Of course, it’s wise to have an emergency fund. But only 44 percent of U.S. adults would pay an emergency expense of $1,000 or more from their savings, according to December 2023 polling.

Challenging circumstances and expenses you’d take back if you could happen to the best of us.  It’s good to keep in mind that nothing is permanent or beyond repair. If you find yourself in credit card debt, research repayment strategies and tools. There are many approaches to pick from. For example, you may decide to move your debt to a balance transfer card or choose one of the popular card payoff methods. Whatever you choose, the key is to stick with it.

Remember: the only thing you can do is your best. Use your credit cards well as much as you can. When you can’t, recognize what went wrong and work to improve the situation. Like any habits, good credit habits take time and effort to build before they come naturally to you. Bumps in the road are almost inevitable — just don’t let them stop you.

The bottom line

Experts can be pretty strict about their credit card usage. They avoid carrying a balance or using a credit card as an extension of their income or emergency fund. They keep track of their cards and remain intentional about the cards they choose to have. Those are all excellent ways to keep your credit and overall finances in good shape. But even if you’re not quite there yet, it’s never too late to start implementing these habits. It might not always be easy, but your wallet will surely be grateful.

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