Credit Card Rules – The 10 Credit Card Rules Every Millennial Should Live By

Let’s just be real, somehow we have witnessed the dangers of mishandling debt and misusing credit firsthand. From underwater mortgages to crippling student loans, we’ve seen how easily finances can spiral out of control.

Credit Card Rules Every Millennial Should Live By

But fear not, for today we’re taking the reins and mastering the responsible use of credit cards. These little plastic rectangles can be powerful financial tools when utilized correctly. However, they also can wreak havoc on our budgets, credit scores, and overall money journey if mismanaged.

That’s why in this post, we will share the 10 ironclad “Credit Card Rules Every Millennial Should Live By.” Consider these your new commandments for navigating the world of credit unscathed. Abide by them diligently, and you’ll be well on your way to building excellent credit while avoiding sleepless nights stressing over unpaid bills.

Credit Card Rules

Are you ready to become a certified credit card master? Then let’s get right in.

1. Thou Shalt Not Spend Beyond Thy Means

The foundational rule that governs all others – spend only what you can afford to pay back in full each month. Going into credit card debt by racking up expenses you can’t cover is a slippery slope toward financial ruin.

Avoid this trap by creating a realistic budget that accounts for income and expenses. Only charge planned amounts to your credit cards that you’re confident you can pay off when the bill arrives. Consider it a mandatory golden rule that you shall not break.

2. Thou Shalt Make Payments On Time and In Full

Nothing, and I mean nothing, is more crucial for maintaining a great credit score than making at least the minimum payment due on time each month. Payment history accounts for a massive 35% of your FICO credit score.

But minimum payments won’t cut it to avoid costly interest charges. You’ll want to pay each statement balance in full to truly unlock the power of credit cards without accruing finance fees. If that’s not possible for a particular month, at least pay more than the minimum to chip away at the principal balance.

I’d even go as far as recommending setting up auto-pay or payment reminders to make this commandment effortless. Your credit score will thank you, which leads us to…

Why Credit Scores Matter

Having an excellent credit score impacts your ability to get approved for loans, low interest rates on mortgages or car payments, rental applications, and more. It’ll save you thousands of dollars over your lifetime!

So nurturing a great credit score by following these credit card rules during your crucial wealth-building millennial years is huge. It sets you up for financial success in major purchases and life milestones ahead.

3. Honor Thy Credit Utilization By Keeping It Low

Just as payment history is vital for credit scores, so too is your credit utilization ratio – the amount of debt you’re carrying compared to your total credit limits. This factor accounts for a hefty 30% of scoring models.

Experts generally recommend keeping your overall utilization below 30% at all times. For example, if you have a total credit limit of $10,000 across all your cards, aim to never surpass $3,000 in combined balances.

Why is maxing out your credit cards such a no-no? Because it’s a red flag to lenders that you’re becoming over-extended, resulting in lower credit scores even if you pay on time.

4. Thoroughly Understand Thy Card’s Terms and Conditions

Yes, I know – reading through those tiny lines of text can be nonappealing. But you’d be wise to carefully digest the rates, fees, and rewards program details for each credit card you own.

Things like:

  • Annual fees and whether they’re avoidable based on your usage
  • The standard APR and how to avoid punitive penalty rates
  • Interest-free grace periods before balances start accruing interest
  • Earning and redeeming policies for cash back/points if applicable

Having this knowledge is pivotal for avoiding unnecessary charges and truly maximizing your cards’ value. Don’t just set them and forget them!

Ask The Right Questions

If you’re ever confused about a term or condition, don’t hesitate to call the credit card company! Ask every question necessary until you fully comprehend your cards’ workings so you can utilize them responsibly.

5. Covet Thy Credit Card Rewards and Benefits

Speaking of maximizing value, why keep a card that no longer proves beneficial or cost-effective? As millennials, we value experiences and conscientious spending over mindless materialism.

That’s why it’s essential to frequently reevaluate which credit cards you carry to ensure they align with your current spending habits and lifestyle. For example, if you’ve done less traveling lately, it may be time to swap out a premium travel rewards card for a cash back card that nets you bonus earnings on things like groceries, gas, dining out, and more.

Always look to squeeze maximum value out of each card’s credits, perks, and rewards categories. That could mean anything from capitalizing on statement credits for streaming subscriptions to scoring free hotel nights through strategic sign-up bonus earnings. Let your cards work smarter for you.

6. Thou Shalt Not Accrue Unnecessary Fees

Annual fees, late fees, balance transfer fees, cash advance fees – these pesky charges certainly add up quickly if you aren’t careful! Avoid them like the plague to prevent eroding the value and perks your credit cards bring to the table.

I think we’re all familiar with late payment fees hovering around $35 or more in most cases. But did you know cash advances frequently tack on both upfront fees (up to 5% of the advance) and usurious interest rates over 25%? Or that popular 0% balance transfer deals often require a 3-5% fee on the total amount transferred?

Pay attention to these potential costs so you can make responsible decisions about whether that cash advance is really worth it, or if you should bite the bullet and open a new card with an extended 0% APR period instead of transferring balances.

7. Use Credit Sparingly and With A Plan

Credit cards can be empowering financial tools, but they should still be used judiciously and strategically. Don’t let swiping plastic replace careful budgeting and expense tracking!

If you find yourself compulsively reaching for credit cards to fund impulse purchases, entertainment, vacations, or even general living expenses you can’t truly afford, that’s a dangerous spiral. Restrict your cards to planned budgeted expenses to avoid overspending.

To make things easier on yourself, only keep open and actively use 3-4 cards max for your biggest categories like gas, grocery, dining out, etc. That keeps things simpler and your utilization low across fewer lines of credit.

Have Specific Goals

Do you hope to earn rewards for upcoming travel? Pay off high-interest debt faster with a 0% balance transfer card? Increase your credit limits and overall utilization ratio.

Having tangible goals for each card can instill discipline when using them. Never mindlessly swipe without knowing exactly how that purchase fits into your financial strategy.

8. Seek Out New Credit Only With A Money-Minded Purpose

While having a decent number of open credit lines can help utilization and credit scores, that doesn’t give you free rein to apply for every credit card offer that lands in your mailbox or email!

Only open new accounts if there’s a defined reason or benefit, like:

  • To earn a massive new welcome bonus to cash out or fund upcoming travel
  • To take advantage of an extended 0% APR period on purchases or balance transfers
  • To score bonus earnings in spending categories relevant to you
  • To build a relationship with a new major card issuer and expand your credit mix

Aside from the hard inquiry hit when initially applying, new accounts will remain a “negative” factor on your credit report for 12 months or so. So time those new apps wisely.

9. Thou Shalt Check Statements and Reports Regularly

Over your millennial lifetime, chances are you’ll come across fraudulent charges, billing disputes, identity theft attempts, errors on credit reports, and more headache-inducing situations that arise around credit cards.

Rather than putting out fires on the back end, staying vigilant and on top of inspecting statements, credit reports, and account activity can prevent those emergencies from ever arising.

Simply review each statement when it arrives to verify every single charge belongs to you. Get a free copy of your credit report annually to ensure no inaccuracies or surprise derogatory items are dragging you down. And monitor things like credit limits, interest rates, reward balances, and payment due dates.

The more plugged in you are to the details of your credit life, the quicker you’ll catch any anomalies that could potentially snowball into larger issues down the road. So pay attention!

10. Ask For Forgiveness and Repair When Mistakes Happen

Despite our best efforts to be near-perfect credit cultivators, mistakes and occasional slip-ups may still happen. We’re only human after all.

The good news is that every credit misstep generally isn’t a death sentence, as long as you take swift corrective action. For example:

  • If you miss a due date, call the card issuer immediately. Many are willing to refund late fees and not report lateness to bureaus for a one-time mistake.
  • If you rack up penalty interest rates, get back on track with on-time payments for 6-12 months, then request getting reverted to standard APRs.
  • If you go over your limit or your utilization skyrockets, hop on a payment plan to pay it down as aggressively as possible. Or perform a balance transfer to a lower-interest card.

The key is taking responsibility, asking for reasonable leniency when needed, and implementing a recovery plan before things spiral out of control.


Credit cards are financial tools that can be a force for good – rewarding us for smart spending habits while helping build the credit scores needed to achieve major life milestones.

However, as with any financially powerful product, credit cards must be approached diligently and with discipline. Follow the 10 key credit card commandments in this guide to maintain responsible usage.

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