How To Manage Credit Cards To Avoid Fees and Maximize Benefits

Ashley Ferraro, Consumer Operations
Aug 18, 2023
 • 
10
 Min Read
A photo of a person trying to manage multiple credit cards with a wallet in front of them

Source: Karolina Grabowska

Credit card debt reached $986 billion in the first quarter of 2023, according to the New York Federal Reserve’s report. If you’re not careful, you can easily lose track of your finances and get trapped in debt

Read this article to learn how to manage credit cards responsibly. These six tips can help reduce the risk of unwanted charges:

  1. Check your card statements and reports
  2. Pay off your balance
  3. Be mindful of the credit limit
  4. Beware of unwanted fees
  5. Use a credit card management app
  6. Protect your data

Check Your Credit Card Statements and Reports

A photo of a person pulling a Visa Gold credit card out of their wallet

Source: Rann Vijay

To stay on top of your financial situation, checking your card statement regularly is crucial. Here’s what you should do and when:

Actions To Take
When?
Explanation
Track spending
Always
Keep track of all your expenses to ensure you stay within the budget.
Check the due dates
Monthly
Know when all your payments are due to plan finances accordingly.
Monitor transactions
Weekly
Review the transactions regularly to detect discrepancies, such as overcharges, errors, and potential fraud.
Report issues Immediately
Notify the bank right away if you notice any unauthorized transactions to increase the chances of your claim being approved.

Monitoring your payments is easier than ever before because most banks allow you to access your statements online, usually via the web banking platform or mobile app. Some institutions also send a notification each time a transaction occurs so that you can detect discrepancies on time.

Pay Off Your Balance

The American Bankers Association reports that over 56% of all credit card accounts in the third quarter of 2022 held debt, a concerning statistic considering the severity of consequences that come with unpaid balances.

To avoid penalties and debt, pay your dues in full and on time each month. Take into account that processing payments may take a few days. 

If possible, you should try to pay off the entire balance, not only the minimum amount. Remember, any debt carried over to the next month will be subject to interest rates, and your new purchases may incur extra charges. 

Late payments can entail fees, an interest increase, a credit limit decrease, a credit score reduction, or card cancellation.

If you’re worried about being late with your payments, set up Direct Debit payments and have them processed automatically each month. You can also transfer the balance to another card with lower rates to consolidate the debt.

Be Mindful of the Credit Limit

A photo of a brown wallet containing payment cards

Source: Stephen Phillips

Each credit card comes with a limit. Going over it can lead to significant consequences, including:

  • Declined payments
  • Over-the-limit fees
  • Reduced limits in the future
  • Damaged credit scores
  • Increased interest rates

If a higher limit suits you better, don’t wait to exceed the current one. Contact your bank and request an increase to keep a lid on your credit utilization ratio—the amount of credit you currently have divided by the credit limit. Remember that the lower the score, the better. Most experts suggest keeping the ratio under 30%, but some recommend 10% for an excellent credit score.

Beware of Unwanted Fees

Unlike debit cards, credit cards typically entail fees for cash withdrawals, gift card purchases, currency exchanges, and checks. The cash advance interest rates on credit cards are also usually substantially higher than for standard purchases.

With credit cards, you must be extra careful with your spending to avoid exceeding your budget. If you no longer want to use a service, cancel it before you accrue further charges. The same goes for free trials that require your card details. Getting a refund for a service once charged is usually difficult, so you should carefully track all upcoming payments.

Use a Credit Card Management App

Modern technology has simplified card and finance tracking, so a card management app can help you manage all credit cards in one place. 

Check out the main features and benefits of credit card management apps below:

Feature Explanation Benefit
Expense monitoring
Card management apps give you the current overview of your funds.
Detecting patterns in your spending, which is valuable for financial planning.
Budgeting Many apps allow you to set spending limits and allocate resources.
Preventing overspending and accompanying costs, such as overdraft fees.
Card feature tracking They help you stay on top of all your cards, i.e., their balance, rewards, limits, fees, and interest rates.
Saving you from memorizing card details or manually tracking the balance of each card.
Alerts and reminders In-app payment reminders and alerts notify you about transactions and payment deadlines.
Detecting fraudulent activity immediately.
Credit score review
You can track your credit score and the factors influencing it.
Giving an overall picture of your financial health.
Security Most apps are typically equipped with robust security measures like multi-factor authentication.
Enabling access to your financial data without exposing it to others.

Protect Your Data

According to Security.org’s research, over 65% of credit card owners experienced fraud at least once in their lives. Credit card fraud comes with many consequences for the victim—from financial loss to emotional distress. 

Still, the negative effects of card fraud can be mostly avoided if the fraud is noticed and reported on time. You must be vigilant, monitor your account regularly, and employ all the security measures available. 

A close-up photo of two payment cards sitting on top of a keyboard

Source: Leelo Thefirst

Here are seven actions to take to protect sensitive information and reduce the risk of credit card fraud:

  1. Keep your cards and information secure—Carefully store your cards and other sensitive data. Share it only with people you trust. If you can’t remember your information, use one of many available card management apps to access it securely.
  2. Use strong passwords—Create strong and unique passwords for each website, making them difficult for hackers to guess. Use a password manager if you need help keeping track of your passwords.
  3. Beware of phishing and pagejacking attempts—Buy only from trustworthy online vendors, i.e., those with the security certificate (look for the “https” prefix and padlock symbol) and positive reviews. Avoid suspicious websites and links. Always double-check the sender’s email address before giving away your information.
  4. Stay away from public Wi-Fi networks—Never make online purchases or enter your sensitive data when connected to public networks, as they are vulnerable to hacking.
  5. Enable multi-factor authentication—Set up multi-factor authentication for additional security when logging into the banking app or making transactions. 
  6. Set up transaction alerts—While you should monitor your account regularly, enabling transaction alerts is a good idea because you get notified as soon as transactions happen, which can help you detect fraud.
  7. Use virtual cards—When shopping online, mask your card information with virtual cards to protect it from merchants and other parties.

How Virtual Cards Enhance Security

A virtual card is a randomly generated 16-digit card number that you can use for online shopping.

This card is connected to your bank account, debit card, or credit line but hides your real card or bank information from the merchant. In the case of a data breach on the merchant's website, a hacker could only access your virtual card data, not your actual financial details. 

Virtual cards help protect you from fraud in many ways. They typically allow you to set spending limits, declining all purchases that exceed the designated budget. Some also close automatically after a single use or a preset period, making your virtual card information even more difficult to misuse.

Many banks offer virtual cards to their existing customers, but they often come with limited features. Connect your existing bank account or debit card with Privacy and generate virtual cards to enjoy advanced security features and complete control over your spending.

Mask Your Sensitive Information With a Privacy Virtual Card

Privacy lets you set spending limits to prevent overcharging and hidden fees. You can also create Merchant-Locked Cards that lock to the first vendor they're used at. A potential hacker who accesses your virtual card number can't use it elsewhere.

Practical Single-Use Cards automatically close after the first purchase, so they’re an ideal security measure for buying on websites you’ve never used before. In case of a data leakage, your virtual card data will be useless to a potential hacker.

Privacy also makes managing multiple cards easier. You can track and manage all your cards and expenses from a single dashboard. By enabling push notifications, you can identify fraudulent activity on time and have Privacy’s expert support team help resolve the issue.

To make online transactions and card management effortless, Privacy offers the following:

  • Browser extensions for Firefox, Safari, and Google Chrome—They fill out the virtual card information in your stead, making checkouts quick and seamless. You won’t have to search for your wallet or type your card numbers when you want to complete a spontaneous purchase.
  • Mobile app—Allows you to create virtual cards on the go and receive push notifications when the card is used or declined.
  • Card sharing—Lets you share information safely with your trusted family members or employees while maintaining control of spending limits and settings.

How To Start Using Privacy in Four Steps

Getting started with Privacy is straightforward—you only need to:

  1. Sign up
  2. Fill out the required Know-Your-Customer (KYC) information
  3. Connect a debit card or bank account
  4. Request Privacy Cards

With the base tier, which is free for domestic transactions, you can:

  • Generate up to 12 virtual cards per month
  • Set spending limits, pause, and close the cards 
  • Access the browser extension and app

For more cards but also cashback, priority support, and account management, opt for the Pro ($10/month) or Teams ($25/month) plan.

Privacy — Seamless & Secure Online Card Payments
Checkout securely online by creating unique virtual card numbers for every purchase. Avoid data breaches, unwanted charges, and stolen credit card numbers.
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