Don’t chase rewards if you carry a credit card balance

Around 80% of Americans currently have one or more credit cards. Anh Tran, a managing partner and certified financial planner at Sage

Mint Wealth in Irvine, California, advises carrying three credit cards if you operate a business: one for business spending, one for backup plans, and one for primary needs.

She advises against using a credit card if you are unable to pay off your bill in full before the due date.

"Paying interest on top of interest on a balance you've built up at 20% percent, I mean, that's a really large hole you're continuing to dig and it's going to be really hard to come out of if you don't pay your credit card amount," Tran said.

The average American has four credit cards, yet not being able to pay off the bill in full each month can hurt both your wallet and credit score.

The Federal Reserve Bank of New York estimates that in the fourth quarter of 2022, Americans' combined credit card balances were $986 billion. Those who are making payments on that debt shouldn't use credit cards because the interest rates they pay surpass any perks they could receive.

Your lifestyle and the way you approach the game will determine how much money you may save by using credit cards. Naturally, that assumes you're utilizing them sensibly.

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