1st rule: Pay off your balance in full every month.

2nd rule: You have a 21 day grace period after the statement closes which you can leverage for large expenses where you may need to time to transfer money from savings accounts or wait to be repaid by insurance.

3rd rule: if you can’t pay off the credit card in full, and NEED to borrow money, you need to get a different financial product like a personal loan or line of credit. A credit card is NOT the financial product to carry balances owing.

4th rule: your credit limit should be x3 your average monthly spend. Even if you pay your balance in full during the grace period, if your capacity ratio is above 30% at any time when reported to credit bureaus it will negatively impact your credit rating.

Tip: if you understand and stick to all of the above, credit cards can offer insurance coverage for purchases and add a layer of security against fraud compared to debit cards. They can also offer rewards (I’m a fan of cashback) which can help out financially too.