Once you apply and get approved for the SoFi Credit Card, tap to play and win up to $10,000 in rewards points. No purchase necessary. See Official Rules

Tips for Using a Credit Card Responsibly

May 17, 2021 · 5 minute read

We’re here to help! First and foremost, SoFi Learn strives to be a beneficial resource to you as you navigate your financial journey. Read more We develop content that covers a variety of financial topics. Sometimes, that content may include information about products, features, or services that SoFi does not provide. We aim to break down complicated concepts, loop you in on the latest trends, and keep you up-to-date on the stuff you can use to help get your money right. Read less

Tips for Using a Credit Card Responsibly

It’s hard to imagine a world without credit cards. They make it easy to reserve a hotel room, flight, or rental car—and to conveniently purchase gas, groceries, gifts, and more.

Credit cards can help people build credit —and potentially earn cash reward points, among other benefits. With a credit card, you don’t have to carry cash, debit cards, or checks if you don’t want to, plus you can order items with your card and, if they don’t arrive in satisfactory condition, you have some leverage to get your money back (limitations apply).

Credit cards are used by some as short-term loans and, if you pay your balance in full each month by the due date, it’s essentially a no-interest short-term loan (though keep in mind that some credit cards charge an annual fee).

The challenge comes in, of course, when you can’t pay your balance in full in a relatively short time. The average credit card interest rate for existing accounts is a whopping 14.4% , and interest charges add up very quickly.

In this post, we’ll share some very high-level tips that may help you use your accounts responsibly and may help you get your credit card balances under control.

Before we get started, though, we want to point out that none of this should be taken as financial advice. And we know this goes without saying, but always consult a qualified and licensed professional if you feel you need help with your finances.

1. Avoiding Making Too Many Impulse Purchases

How many is “too many” depends upon how much your impulse purchases cost and how easily they fit into your budget.

If you know you can pay off your credit card balances and otherwise meet your monthly expenses and savings goals, then that’s an entirely different situation from one where your impulse purchases are too large to be paid off each month and/or keep you from meeting other financial responsibilities or goals.

If you enjoy making spontaneous buys, then you may consider including this as a line item in your monthly budget and then sticking to it. This could add enjoyment to your life without causing financial problems.

Recommended: When Are Credit Card Payments Due

2. Using the Right Credit Card

There are a variety of different types of credit cards and depending on how you plan to use it, one option may make more sense than another. Some credit cards charge an annual fee, while others may offer rewards for certain purchases or cashback, which can be helpful benefits for consumers.

For example, if it will take a few months to pay off a purchase, then it makes sense to use one with the lowest interest rate available. That way, when you do have interest charges, they’ll be as low as possible.

Here’s another scenario. Let’s say you’ve just made a major purchase that you’ve budgeted to pay off in six months. It might make sense to transfer the balance to a zero-interest credit card.

These credit cards typically offer a no-interest introductory period before reverting to the card’s regular interest rate and annual percentage rate (APR) which could be quite high.

So long as the balance is paid in full during the introductory period, this can be a useful strategy. If not, you might end up owing at a higher interest rate than you would have before you’d transferred the balance.

And here’s another catch. Sometimes, if you have a remaining balance when the introductory period ends, the company collects interest on your original principal, not just the remaining balance. So, in that situation, nothing was really free.

It may also be a good idea to consider annual fees (if any), as well as cash back options and other perks, when choosing the best card for you.

Cash in on up to $300–and 3% cash back for 365 days.¹

Apply and get approved for the SoFi Credit Card. Then open a bank account with qualifying direct deposits. Some things are just better together.

3. Taking Advantage of Benefits Offered

Signing up for eligible rewards programs can help credit card holders make the most of their card. Each type of credit card may have slightly different reward programs.

See what perks are being offered—if you’re not sure, check the card’s website or ask the credit card company for specifics. Once you know what they are, you can choose the ones you like and use them as strategically as you can.

You may discover that the card(s) you have don’t have the best benefits match for you. For example, perhaps you’re a frequent flyer. If so, some cards have better air-travel benefits than others. If you drive around the country instead, you could find one that offers the best cash-back deals on gas.

When switching credit cards, you might want to avoid closing the old one—that’s because canceling it might ding your credit rating. (If there’s a fee on the old card, though, it may make sense to cancel.)

Related: How to Cancel a Credit Card

Finally, if you are earning rewards points, consider the best way to use them. Sometimes it’s possible to get a bigger bang for your buck if, say, you use your rewards points at an approved store rather than opting for cash back.

4. Signing Up for Automatic Payments

To avoid missing payments or making them late, consider signing up for an automatic payment plan with the credit card company.

Another option is to sign up for automatic reminders about payment due dates (by text, for example, or by email), either through the credit card company or via a calendar app. What’s most important is coming up with a plan that accomplishes your goals in a way that works best for you.

5. Regularly Checking Your Statements

Mistakes do happen on credit card statements and, unfortunately, fraudulent activities could affect the account. So you might want to check your statement every month to ensure that you’ve made all the charges that appear on each statement, and that any payments you’ve made are reflected.

If something is missing, review the statement dates to see if the transaction may have happened, for example, right after the statement cut-off date. If something seems off, consider contacting the credit card company to verify.

If you notice any fraudulent activity, contact the credit card company as soon as possible.

Recommended: Does Applying For a Credit Card Hurt Your Credit Score

Tackling Outstanding Balances

Let’s face it: Credit card debt can be hard to pay off—and here is one of the reasons why. Many credit card companies charge compounding interest, which means that not only will you owe interest on any outstanding balance, you’ll also end up paying interest on the interest.

That’s because this interest is calculated continually, then added to your balance—and may be compounded daily. So it’s easy to see how fast balances can keep going up—and up and up.

Interest compounds even when you make required minimum payments. It compounds unless you pay off your balance in full. To get an idea of what unpaid interest could mean for you, use our credit card interest calculator.

Consolidating Credit Card Debt With a Personal Loan

To break this debt cycle, and depending upon the terms offered, it may make sense to consolidate your credit cards into a personal loan. Reasons could include:

•   Qualifying for a lower interest rate on a personal loan. Lower interest rate = less interest owed overall = more money going to pay down the principal (depending on the loan term).
•   Most personal loans offer a fixed rate option, which means the interest rate does not change over the life of the loan. This can be helpful when creating a budget, since you know how much is due each month in terms of payment.
•   A personal loan to consolidate credit cards could lower how much you’re paying each month on what you owe depending on what term you choose.

The Takeaway

When used responsibly, credit cards can be helpful for a whole slew of things, from making online purchases to building credit. The keywords there are, “when used responsibly.”

To stay on top of your credit cards, tips like signing up for automatic payments, making the most of the rewards programming, and using the right type of credit card for your use are all important.

If you’re currently repaying credit card debt, crafting a plan to get on top of it is important. One strategy is to consolidate credit card debt with a personal loan, which can help streamline monthly payments and could allow borrowers to qualify for a lower interest rate than on their credit cards.


You will need to maintain a qualifying Direct Deposit every month with SoFi Checking and Savings in order to continue to receive this promotional cash back rate. Qualifying Direct Deposits are defined as deposits from enrolled member’s employer, payroll, or benefits provider via ACH deposit. Deposits that are not from an employer (such as check deposits; P2P transfers such as from PayPal or Venmo, etc.; merchant transactions such as from PayPal, Stripe, Square, etc.; and bank ACH transfers not from employers) do not qualify for this promotion. A maximum of 36,000 rewards points can be earned from this limited-time offer. After the promotional period ends or once you have earned the maximum points offered by this promotion, your cash back earning rate will revert back to 2%. 36,000 rewards points are worth $360 when redeemed into SoFi Checking and Savings, SoFi Money, SoFi Invest, Crypto, SoFi Personal Loan, SoFi Private Student Loan or Student Loan Refinance and are worth $180 when redeemed as a SoFi Credit Card statement credit.

Promotion Period: 4/5/2022-12/31/2022. SoFi reserves the right to exclude any Member from participating in the Program for any reason, including suspected fraud, misuse, or if suspicious activities are observed. SoFi also reserves the right to stop or make changes to the Program at any time.

Eligible Participants: All new members who apply and get approved for the SoFi Credit Card, open a SoFi Checking and Savings account, and set up Direct Deposit transactions ("Direct Deposit") into their SoFi Checking and Savings account during the promotion period are eligible. All existing SoFi Credit Card members who set up Direct Deposit into a SoFi Checking & Savings account during the promotion period are eligible. All existing SoFi members who have already enrolled in Direct Deposit into a SoFi Checking & Savings account prior to the promotion period, and who apply and get approved for a SoFi Credit Card during the promotion period are eligible. Existing SoFi members who already have the SoFi Credit Card and previously set up Direct Deposit through SoFi Money or SoFi Checking & Savings are not eligible for this promotion.

New SoFi Checking and Savings customers and existing Checking and Savings customers without direct deposit are eligible to earn a cash bonus when they set up direct deposits of at least $1,000 over a consecutive 30-day period. Cash bonus will be based on the total amount of direct deposit. Entry into the Program will be available 4/5/22 to 5/31/22. Full terms at sofi.com/banking. SoFi Checking and Savings is offered through SoFi Bank, N.A. Member FDIC.

SoFi members with direct deposit can earn up to 1.25% annual percentage yield (APY) interest on all account balances. There is no minimum direct deposit amount required to qualify. Members without direct deposit will earn 0.70% APY on all account balances in Checking and Savings (including Vaults). Interest rates are variable and subject to change at any time. Rate of 1.25% APY is current as of 04/05/22. Additional information at http://www.sofi.com/legal/banking-rate-sheet.

SoFi Loan Products
SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC), and by SoFi Lending Corp. NMLS #1121636 , a lender licensed by the Department of Financial Protection and Innovation under the California Financing Law (License # 6054612) and by other states. For additional product-specific legal and licensing information, see SoFi.com/legal.

Disclaimer: Many factors affect your credit scores and the interest rates you may receive. SoFi is not a Credit Repair Organization as defined under federal or state law, including the Credit Repair Organizations Act. SoFi does not provide “credit repair” services or advice or assistance regarding “rebuilding” or “improving” your credit record, credit history, or credit rating. For details, see the FTC’s

1See Rewards Details at SoFi.com/card/rewards.
The SoFi Credit Card is issued by The Bank of Missouri (TBOM) (“Issuer”) pursuant to license by Mastercard® International Incorporated and can be used everywhere Mastercard is accepted. Mastercard is a registered trademark, and the circles design is a trademark of Mastercard International Incorporated.
SoFi cardholders earn 2% unlimited cash back rewards when redeemed to save, invest, or pay down eligible SoFi debt. Cardholders earn 1% cash back rewards when redeemed for a statement credit.1
External Websites: The information and analysis provided through hyperlinks to third-party websites, while believed to be accurate, cannot be guaranteed by SoFi. Links are provided for informational purposes and should not be viewed as an endorsement.
Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.


All your finances.
All in one app.

SoFi QR code, Download now, scan this with your phone’s camera

All your finances.
All in one app.

App Store rating

SoFi iOS App, Download on the App Store
SoFi Android App, Get it on Google Play

TLS 1.2 Encrypted
Equal Housing Lender