4 Credit Card Rules That You Can Break

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They say that rules were meant to be broken, but it’s usually very costly to violate the terms of your credit card or just act counter to the conventional wisdom of credit card usage. But that’s not always the case. There actually are some rules that you can break and get away with it — but you have to be smart about it.

So here are four times you may be able to break the rules without serious consequences.

1. Making a late payment.

Rule No. 1 for responsible credit card use has to be “make your payments on time,” as making a late payment will typically result in costly late fees, interest charges, a penalty interest rate and a hit to your credit score. (You can check your credit scores for free on Credit.com to see how late payments are affecting your credit.) Yet there are two times where you can break that rule, though they’re not entirely consequence-free. The first case is with credit cards that do not charge late fees, such as the Citi Simplicity or the PenFed Promise. You can avoid the fees, but your credit will still take a hit, so this may not be the smartest move.

The other time is when you have an excellent payment history and you accidentally pay late. In most cases, card issuers will waive late payment fees and interest incurred when this happens for the first time. In fact, the Discover card will even forgive a cardholder’s first late payment automatically. Just don’t make a habit of paying late, as the card issuer’s goodwill won’t last.

2. Don’t open a new credit card if you have debt.

Another credit card rule that most people will agree with is that you shouldn’t open a new account when you have existing credit card debt. Certainly, those who have trouble spending within their means should not be continually seeking to open, and utilize new lines of credit. But the exception to this rule is when then the new credit card offers 0% APR promotional financing on balance transfers (here are some of the best balance transfer credit cards for exactly this purpose). In this case, you can actually save money by avoiding interest charges on your existing purchases. So breaking this rule can be a good idea, so long as you do so in order to to reduce your debt, not increase it.

3. You shouldn’t be earning rewards if you have debt.

Since rewards credit cards typically have a higher interest rate than their non-rewards counterparts, those with debt will save more money with the lower-interest card. This is because the value of the rewards earned will usually be less than the cost of the additional interest paid.

But there are some exceptions to this rule. First, there are rewards credit cards that offer interest-free promotional financing. In addition, those who travel frequently for work and have their expenses reimbursed by their employer can use a rewards card just for these charges. So long as they receive their expense checks in a timely manner, they can endorse them to the card issuer and avoid interest on those charges by paying their statement balances in full each month. In this way, they keep their personal debt, and interest charges, separate from their business travel expenses, while earning valuable cash back or travel rewards.

4. Don’t use more than 30% of your credit limit.

This practical rule of thumb can help credit card users maintain — or improve — their credit scores. But when you by pay your entire balance in full, its OK to make large purchase that forces you to temporarily exceed 30% of your credit line and they won’t have a negative impact on your credit score if you issue a payment to your credit card issuer early, before your statement cycle closes. For purchases like this, there is no reason to forgo earning valuable points, miles or cash back.

Note: It’s important to remember that interest rates, fees and terms for credit cards, loans and other financial products frequently change. As a result, rates, fees and terms for credit cards, loans and other financial products cited in these articles may have changed since the date of publication. Please be sure to verify current rates, fees and terms with credit card issuers, banks or other financial institutions directly.

At publishing time, the Citi Simplicity and Discover cards are offered through Credit.com product pages, and Credit.com will be compensated if our users apply for and ultimately sign up for any of these cards. However, this relationship does not result in any preferential editorial treatment.