Best Practices For $5,000 Credit Card Limit

Learn how to spend responsibly to avoid debt and improve your credit score.

by contentwriter

Author: Kelly Hall

Compared to cash or debit card, credit card is a more convenient way to make everyday purchases. Aside from being safer, using credit cards wisely helps to build a strong credit score.

Today, we will be sharing insights that can help you whether you are a first-time credit card owner or just got a new credit card and want to increase your limit. But first, let’s review the basics of using credit cards.

The Basics of Using a Credit Card

  • To pay for big invoices
  • Earn rewards that are equal to a percentage of what you spent.
  • Pay your credit card bill in full when due

If you pay for your credit card bill on or before the due date, you won’t have to pay the interest charge, but If you are 60 days late on your credit card payments, you might have to pay an annual percentage rate (APR) of approximately 30 percent.

Credit Card Maintenance Tips

These practices will help you get the best out of your credit cards:

  • Pay Your Credit Card Bills on Time

Your bank can assist you in establishing automatic payments from your checking accounts to your credit card before the due date. Making multiple monthly payments can make paying your credit card bills easier.

Stacking your credit card bills from month to month only adds to your existing balance, making it more difficult to stay up with payments. To avoid debt and lower your annual percentage rate (APR), don’t wait until your bills are due before you pay. 

  • Spend Within Your Means

Spending within your means will make it easier to pay your credit card bills in full and on time while allowing you to avoid debt. A credit card is a tool that lets you build credit and pay for large purchases in small amounts. Therefore, it is advisable to buy essentially useful items. 

  • Consider Mid-Cycle Payments.

Credit card issuing companies send monthly account reports to their customers at the end of the month. This information includes card transactions for the previous month with the closing balance. The credit card balance is an important piece of information that is used to calculate the utilization ratio. 

In other words, your credit utilization ratio is the percentage of your current credit. If you have $2,000 left on your $5,000 credit card, your utilization rate will be 40%.

Credit utilization ratio is an important factor in credit scores, and it is advisable to keep it below 30%. If you carry a balance on your credit card from the previous month, then making multiple payments during each billing cycle can reduce your overall interest rates. This is because interest accrues based on the average daily balance of your billing period.


A credit card is a secure and convenient method of paying bills and making purchases. However, it is also important that you use your credit card responsibly to avoid debt. If you are looking for means to improve your credit score, ensure you pay your credit card bill in full and on time. 


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