Credit cards: the guide to using them in your favor (and not the other way)

The credit card is not free money: it is a tool. Used wisely, it gives you up to 40 days of interest-free financing, rewards and purchase protection. Used badly, it is the gateway to over-indebtedness. This is the guide to make it work in your favor.

The golden rules

• Pay the full balance every month. If you pay only the minimum, compound interest eats any benefit.
• Do not use more than 30% of your limit. Keeping usage low protects your credit history and score.
• Always review the statement. Unrecognized charges must be disputed in time.

When to use it (and when not)

It is worth using for planned purchases, online (with its protection layer) and to accumulate points or miles. It is not worth it to cover recurring expenses you cannot pay at month’s close or for “buy now, figure it out later”: card debt is the most expensive in the Dominican financial market.

The key figure

30%. The percentage of your limit you should not exceed to maintain a healthy history.