Credit cards get a bad rap. We are taught that they are inherently bad and to avoid them at all costs. But what if you could make your credit cards work for you? I think you can!

Before I get into how to get the most out of your credit cards, there’s an important first step you must take. Know thyself. Be fully aware of and honest about your habits and any money issues you have had in the past. If you struggle to pay back your credit cards in full, using credit cards may not be the best choice for you. Of course, there are ways to mitigate those issues, and I’ll write about that in a later post.

Credit cards get a bad rap. We are taught that they are inherently bad and to avoid them at all costs. But what if you could make your credit cards work for you? I think you can!

There are a few reasons that credit cards are great. First of all, they help you build your credit history. If you’ve gone through your whole life without any credit cards or other loans, you won’t have any credit history. This negatively impacts your credit score, and will hurt your chances for being approved for other loans like a mortgage or personal loan.

Another reason that credit cards are great is the rewards that can come with them. I went too long in my life only using my debit card or credit cards that had no rewards program. I know better now, and I only use cards that maximize my rewards.

If you trust yourself to manage credit cards well, there are a few rules to follow.

Only spend what you can afford to pay back.

This might seem like common sense, but most people look at credit cards as free money. Think of your credit card in the same way as you would your debit card. Pay attention to your budget, and know how much money you can spend each month without going into the red. Then, only put that much money on your card each month.

Always pay on time.

If you don’t trust yourself to remember, set up auto-pay. Otherwise, set a calendar reminder for your due dates. Paying on time will make sure you don’t get charged with penalty fees, and also helps you maintain a good credit score.

Always pay off the balance.

Interest rates on rewards cards tend to be sky high. That’s how the companies are earning money while also giving you points, miles, and cash back. If you pay off your balance in full each month, you won’t incur the high interest.

Keep track of your one year anniversary.

(Note: This only applies if you’re using rewards credit cards to maximize your ability to travel. It’s not for everyone.) Many rewards cards have no annual fee for the first year of having the card. Once that year is up, you will be charged anywhere from $50-450, depending on the card you have. If you don’t want to owe an annual fee, make sure you either call and ask them to waive it for another year, ask them to downgrade you to a no-fee card, or cancel the card all together. (Another note: Closing a credit card within a year won’t seriously hurt your credit score. It’s your older accounts that matter the most.)

Now, why do all of those things? What can credit cards really do for you? They can save or make you money if you use them right!

Airline miles

Do you travel a lot? Even if you just fly home a few times a year, an airline card might be a good option for you. Most airline cards include free checked bags, and some even have a companion pass (when someone can fly with you for a low price). If you tend to fly the same airline every time you travel, consider getting their rewards card. Most of these cards also offer a bonus amount once you reach a minimum spending requirement. These bonuses can range from 20,000-100,000 miles. Those miles can be used for free flights in the future. For example, I flew roundtrip to the UK for only $100 in taxes and fees, using my American Airlines miles. (Note: Be careful. If you know you can’t afford to reach the minimum spending requirement before the deadline, don’t get a card like this. Don’t overspend just to get bonus miles.)

Cash back

I love cash back cards. You can use it on anything and the rewards won’t expire as long as you keep your account open. Many of these cards also come with a large bonus amount in the beginning. You then continue to accrue cash back as you’re using the cards. This cash back can be transferred directly to your bank account, or you can use it with any account partners to get discounts when you shop. The spending requirements tend to be lower on these cards than airline cards, but still be vigilant and honest about what you can afford.

Other rewards

There are many other kinds of rewards cards. Hotels, car rental companies, and more have their own credit cards. There are also credit cards that have rewards that can be transferred to an airline or hotel as points. Think about the types of rewards that would do you the best good.

You can find many different credit card options here, along with their pros and cons. Keep in mind things like this: minimum spending requirements, foreign transaction fees, and annual fees.

Do you use rewards credit cards? What do you love about them? What do you hate about them? Share your story in the comments below!

See below for a cool infographic from Fundera for more about the path to credit card success.