Many Filipinos are under the mistaken assumption that being a wise credit card user means not using a credit card at all. Sure, debt-free is stress-free, but credit cards offer a countless of perks and rewards you simply won’t have access to if you use cash in every transaction. If you’re smart about your credit card usage, you can take advantage of these offers without having to pay any additional fees or unreasonably high post-interest prices on your purchases. Below are some of the characteristics of wise credit card users:

1.  They’re well-informed

Wise credit card users make sure that they are well-informed before they even attempt to sign up for a credit card. They read through the terms and conditions of each card and familiarize themselves with how the fees will be assessed and how the interest will be charged. They choose credit cards that offer rewards that are in line with their spending habits, and they make sure that those perks don’t go to waste. They go through their credit card statements meticulously to make sure that all discounts and rebates have been applied appropriately. They supplement their spending with promotional offers and discount codes where they’re available and they know where to shop in order to maximize their rebates. Being a wise credit card user means being on top of the information game.

2. They keep track of their expenses

The cardinal rule of credit cards is simple: don’t spend more than you can afford.

Smart credit card users keep track of their purchases so that they know what to expect when the statement arrives. More importantly, this is done to ensure that they’re staying within their credit limit. After all, maxing out one’s credit cards means having to pay extra for over-the-limit fees, and doing so frequently can affect your creditworthiness, thus hurting your prospects should you wish to apply for a home or auto loan in the future.

As a rule, wise credit card users keep their balances below 25% of their credit limit in order to remain in good standing with banks.

3.: They don’t make cash advances

Making cash advances with your credit card is one of the fastest ways to drown in debt. Whenever you withdraw from a cash machine with your credit card, you not only have to pay a cash advance fee of at least 5%, you’ll also be subjected to a higher interest rate than if you purchased directly with the card. Most credit cards don’t have grace periods on cash advances either, so unless you can pay it off quickly, there’s no real way to dodge a finance charge.

Cash advances should only be utilized if you’re in dire need of it and are confident that you can square it off immediately. Wise credit card users don’t make use of the feature at all.

4. They pay all of their monthly bills in full and on time

If “don’t spend more than you can afford” is the first rule of using a credit card, the second rule should be “pay your monthly balance in full.” Many Filipinos fall into the debt trap by paying only the minimum amount on their credit cards without realizing that the interest rate compounds—you pay more interest for every month that you don’t clear your credit card debt completely.

To avoid these charges, pay the total amount in full every month, and don’t wait on it so as not to incur late payment fees. Aside from the obvious perk of not paying more money for the privilege of using your credit card, staying relatively debt-free and having no history of delinquent payments improves your credit history, one of the factors banks tend to look at when you apply for a loan with them.

#5: They secure their cards against theft and fraudulent activity

Fraudsters and identity thieves are always on the lookout to steal your personal information and rack up purchases on your account. Bank technology is being kept up-to-date to keep your money secure, but as of the moment, there is no perfect method to protect you and your information against these criminals.

Wise credit card users use every advantage available to them to protect themselves against card theft and fraud They immediately report lost or stolen cards, use two-factor or multi-factor authentication, sign up for text or email alerts about every purchase made with the card, and keep an eagle eye on their credit card statements and they account every purchase made within the last month.

Wise credit card users also don’t fall for phishing emails or fake websites that hackers use to collect people’s personal details. You can join their ranks by staying vigilant. Remember, banks will never ask for your card details such as your card number, expiration date, and CVC or CVV number.

At the end of the day, there’s no reason to fear using your credit card. As long as you use it responsibly and employ common sense, you can have the best of both worlds—reap all the rewards that credit cards offer and continue to live stress-free. Start being a wise credit card user today!