Credit cards can help you achieve various financial goals throughout life.

With the right card, you can do everything from funding a large purchase to building your credit score or simply earn great rewards on everyday spending. Understanding common credit card uses can help you make smart credit choices. If you’re hoping to save money on your next big vacation, for example, earning points and miles with a travel credit card can help.

Before you start using your credit card, you’ll have to get one first. You should decide why you want a credit card and how you want to use it, so that you can get one that best meets your needs. It’s also important to be realistic when considering what type of credit card will best suit your spending habits or financial goals — so, check your credit score and make sure your credit card application is likely to be approved. Bankrate’s CardMatch tool can quickly match you with a credit card that best fits — it’s free and won’t impact your credit score.

After you’ve chosen the right card for your goals, you’re ready to start maximizing it.

This guide will take you through all of the steps involved in using credit wisely, so you can reap the benefits while you avoid the things that could lower your credit score, make it more difficult to earn credit card rewards or lead you on a path toward credit card debt.

Pay your credit card bills on time

You always need to pay your credit card bills on time.

Pay your credit card bill in full whenever possible to avoid accruing interest, which makes your purchases more expensive in the long run. If you can’t pay in full, pay off as much as you can by the due date to reduce the balance you’ll pay interest on, and always make at least the minimum payment.

What happens if you miss a credit card payment? Not only does your credit score take a hit, but you could also get stuck with late fees and penalty APRs. Miss too many payments and your debt could go to collections.