When working to raise your credit score, it’s not enough to just get a bunch of new credit cards.  Your score, for the most part, is gauged on how you use your credit account instead of just their availability.  It goes without saying that you’ll need to use the credit responsibly, if your FICO score is going to benefit from it.

Here are a few guidelines to make sure your credit card use nets you in the positive.

1. Make small purchases every month

Use your credit card for small purchases on a monthly basis to keep it active.  If you’re wary about using your credit card (afraid of going into debt), assign it for regular on a controlled expense.  For instance, use it to charge your monthly electric bill, instead of paying cash.  Just use the cash as payment for the card - it works out the same way, while allowing you to build up your credit at the same time.

2. Never carry a balance

Carrying a balance, especially large ones, always hurts your credit ratings.  If you want to derive the maximum benefits on your credit score, pay off any charges you incur every month.  As such, never charge anything more than you can afford to settle within the same month.

3. Use no more than 20% of your available credit

Even when you pay your balance in full month-to-month, keeping your credit card utilization to below 20% will help your score immensely.  While the idea of earning rewards points can be tempting, you’ll need to put a cap on your usage if you want your credit score to benefit.

The short answer is “No.”  Real insurance policies, like life and health, are government-regulated.  Credit card insurance, on the other hand, is just an agreement with the credit card issuer - the “insurance” name is just a way of enticing you to buy into it.

In truth, credit card insurance is better referred to as credit card protection.  Basically, it involves your issuing company agreeing to absorb your  monthly minimums (think of it as an extended grace period) in the event that you’re unable to pay for a predefined set of reasons.  Take note that these qualifying reasons are very stringent - which can lead to you not getting the benefit unless you satisfy all the terms.

The fact that it’s a deal with the issuer instead of an actual third-party insurance is also the reason why you can’t take out a single credit card insurance to cover all your credit cards.  As such, if you keep numerous cards, you’ll have to pay the monthly “insurance” fees individually.  With costs averaging at between $10 to $20 a month, it adds up to a pretty hefty sum.  A suggested course of action is to get credit card protection only for accounts with high balance limits, to ensure at least a modicum of protection in case your finances go awry at some point in the future.

Most financial experts actually dissuade people from agreeing to credit card insurance and to use other alternatives instead.  A term-life policy is often suggested as a way to protect your family from your debt in the event that you die prematurely.  For job losses and other similar circumstances, though, there aren’t many viable alternatives yet.

When you’re trying to improve your credit ratings, store cards are among the easiest credit lines you can apply for.  As such, we’ve recommended applying for in-house credit cards many times over to people who are struggling with bad credit.  What many seem to overlook, though, are gas station-branded credit cards.

Just Like Store Cards

If you frequent a local gas station in your area, you should ask them if they issue credit cards to regular customers.  For the most part, gas credit cards function like dedicated store cards, allowing you to make transactions on that store alone.  While it’s likely not going to pack as many features as other bank-issued credit cards, they should be a helpful tool in building up your credit ratings - and every little bit helps.

Easy To Get

Since you don’t get much perks (or much leeway, for that matter) with gas credit cards, they’re usually easier to apply for.  In fact, some people claim they’re even easier to get than secured credit cards, requiring far more lenient procedures in processing your application.

Regular Use

If you drive at all on a regular basis, there should be no problem keeping a gas credit card active.  Even better, since you’re not likely to run up thousands in expenses (unlike some store credit cards can tempt you to), they’re also easier to manage.  Some gas credit cards will even have rewards tied in, although I’d rather not bother with that since their benefits are usually too marginal to be of any significance.

When kids begin college, it’s almost a rite of passage to end up inundated with credit card offers.  They’ll get in the mail, in the activity halls, slipped under their doors and every time they hit the mall.  We’ve already stressed how important it is to educate college-going kids about proper credit card use but it’s one of those issues you can never point  out enough.

If you are a college student about to get your first taste of credit card use, make sure to keep the following things in mind.

1. A credit card is great because it starts your credit report

Getting your first credit account usually means the start of your credit history, an important step as you prepare for your financial future.  The earlier you can start a credit record, the more you will benefit from it, provided that you take care of your credit spending.

2. Choose student card offers

Students typically get all sorts of credit card offers.  Even if you qualify for most of them, it’s a better idea to go after credit accounts geared specifically for students as they usually carry perks that you’ll find beneficial, such as discounts to restaurants, bookstores and school supplies shops.

3. Save it for emergency expenses

Credit card is not income - that’s one of the lessons many students learn the hard way.  Hopefully, you don’t have to.  Keep your credit card as an emergency, in case your usual fund sources are amiss.  Refrain from using them on avoidable expenses, such as movies and music purchases.  Just because you can swipe, doesn’t mean you should.

Looking for a good gas card?  If you frequently refill at Chevron and Texaco pumps, you may want to consider getting a Chevron credit card, which gets you rebates every time you use the card at one of their stations.

For filling up at a Chevron or Texaco gas station, you get a cash rebate of 10 cents for every gallon when you use your Chevron credit card.  Non-fuel purchases net you 3% rebates, along with 1% cash back for buying non-Chevron goods.  While that may sound like a good deal, here’s the rub: rebates are capped at $300 per year. There is no annual fee on the card.  APR is also pretty standard at between 7.99% to 14.99%.

Personally, I love gas cards and would patronize a station if they will give me one.  Unfortunately, this card from Chevron is very limiting in a lot of ways.  First, the fixed 10 cents to a gallon is a bad deal.  When gas prices go up again, as people are expecting them to in the near future, that leaves you with a very small rebate percentage.  Even worse, the $300 limit is too small.  I’d rather get a more generic gas card, which should leave me a lot more room to work with.

If you use Chevron and Texaco a lot, you can probably get this as an additional credit card.  If you use it strictly for buying gas at Chevron, that’s still $300 saved during the year.  Since there’s no annual fee, it doesn’t hurt you in any way.  Just ditch it when gas prices hit the roof once again.

When you default on your credit card and refuse to arrange a payment program with your credit card company, it’s almost certain that your debt will end up in the hands of collectors. That’s right - hounding, scheming debt collectors who will do all they can to retrieve as much of that money from you.

Debt collection agencies are a money-grubbing bunch - no subtler way of going about it.  They’ll harass you, insult you and pretty much do anything they can, short of breaking state regulations and being liable for a damaging lawsuit.  Once they get you to actually work out a payment deal, they’ll tack on hundreds, sometimes thousands, of dollars on your debt, in the form of “debt collection fees.”

By law, debt collectors are entitled to “tack on” a reasonable fee for their troubles.  However, what’s reasonable to them will likely be an exorbitant and ridiculous expense to you.  There was a documented instance, in fact, when a collection agency claimed a $240,000 expense in retrieving a $1,000 debt.  While that example may be extreme and wouldn’t pass through a judge with his senses intact, most collection companies will be appending expenses that actually make sense.

When a debt collector tacks on amounts to your existing debt, ask them for a written verification of debt request, with an itemized list of the total amount you’ll need to settle.  That way, they’ll forced to present their expenses in a sensible way.  An even better way, however, and one we recommend, is to consult a debt specialist before dealing with collectors.  Experienced in working out debt after debt for consumers like you, these services can actually negotiate with collectors on your behalf.  I have personally seen cases where the debt was reduced to less than 40% of the originally money owed.

Business credit cards are debt facilities for your business.  As such, any problems you encounter with it are supposed to only affect your business scores, not your personal credit standing.  Unfortunately, that’s not always the way it works.

If you are a small business owner, there’s a good chance that your business credit card is affecting your credit rating.  If you are a personal guarantor for the business credit card and used your personal social security number to apply for it (as many small business owners do), you are just as liable for the debt as your business is.  As such, any problems you encounter with the card - from missed payments to going over the limit - reflects on your credit report.

Corporate credit cards, on the other hand, work in a different way.  Different contracts are usually provided for different accounts, so you will need to clarify it with your  company’s personnel resources.  From what I’ve seen, though, you’re usually off-the-hook when it comes to corporate cards.

If you recently ordered a copy of your credit report, you can check it to see if the business credit card is declared as one of your accounts.  Should you find it there, it’s safe to assume that it will affect your overall credit score.  As such, you need to treat it the same way you treat any regular credit card - carefully looking over what gets included in your credit report to ensure accuracy.

The USAA credit card is one of the highest-rated rewards and cash back credit cards in the market.  If you qualify for it, getting one in your wallet is totally in your best interest.  Available in both Mastercard and American Express branding, you can apply for a USAA credit card if you fall in any of the following criteria:

1.  You are an active-duty officer and enlisted personnel in the US Armed Forces
2.  Your parents are eligible for a USAA card and have taken a USAA insurance product (either property or auto)
3.  You are a member of the National Guard or the Selected Reserve
4.  You are an officer candidate in a USAA-commissioning program (e.g. ROTC)
5.  You are a former member of the military in good standing

If you fall in any of the above slots, you may be qualified to get a USAA credit card and we highly recommend that you go after one instead of other current offerings in the market.  Both the Amex and Mastercard versions of the USAA card enrolls you in one of two programs.  You can either apply for it as a cash rebate card or as a rewards card.  Both cards have no annual fee and will net you as low as 7.75% APR.

Cash Rebates. If you opt for the cash rebates program, you get a tiered earnings system.  For the first $2000 you spend, you earn 0.35%.  For the next $2000, you get 0.75% in rebates.  For the next $11,000, it’s a full 1%.  Once you get past that, earnings jump up to 1.25% all throughout, with the money sent your way every January.

Rewards. If you opt for the rewards, you earn a straightforward one point for every dollar you spend.  Points can be exchanged for airline tickets, merchandise, gift cards, donated to charities or converted into cash.

More than the rewards and earnings, though, the USAA Credit Card continually boasts of the best customer service you can find.  In fact, more good things have probably been said about their helpful customer support than any current credit card in the market.

Looking for more secure credit card alternatives for your teen than a prepaid card like Facecard? After all, you still don’t have much control about how they use a Mastercard-branded piece of plastic when left on their own. Take a look at BillMyParents, a new payment method that gives you more control over your kids’ spending.

Kids getting credit cards is pretty scary, especially with the barrage of things they can do with it that are totally without your consent, from things as benign as getting expensive fashion wear to concerning activities like paying for a doctor consultation. BillMyParents looks to go around that, making it mandatory for parents to approve transactions before letting it go through.

The service is only starting and, as such, is very limited. At the moment, the only transaction available is buying products from Amazon. If it does roll out in a huge manner, though, and offers its services away from the web, it can be a game-changer.

How much better would you feel if every purchase your teenager did had to go through you? When they hit an upscale store, for instance, you’d get a notification on your cell phone that you’ll have to approve before the sale is closed. Same with purchases they try to make at the bookstore or any place else.

I have no doubt this thing will go beyond online shopping (as is BillMyParent’s current path) eventually, as the idea seems that good. BillMyParents (which is owned by San Diego-based company Socialwise) currently charges $0.50 per transaction - a totally acceptable fee in exchange for complete peace of mind.

Any form of insurance that protects you and your assets has to be good.  Designed to protect your credit rating in the event of a job loss or any similar event that leaves you unable to settle your balance, it makes sense to pay for it on the surface.

Unfortunately, credit card insurance is frequently one of those things that carry more drawbacks, compared to its benefits.  What is there about credit card insurance that’s not to like?  Consider these:

Credit card insurance is very expensive. If you have 5 credit card accounts, you’ll need to pay for 5 insurance policies.  At costs averaging between $10 to $20, that’s a lot of money that most people can probably better use somewhere else.

Filing for claims is hard. Like all insurance policies, requirements for claims is very strict.  Even worse, some of the requirements may not be what you’re expecting and are often compounded with additional conditions (such as having to present updated proof of unemployment month-to-month).  Let’s just say that insurance companies make a ton on credit card insurance and generally pay out in very few cases.  Make sure to get an expert’s opinion before signing up for credit card insurance as the terms are generally very confusing.

Benefits aren’t even that good. Credit card insurance doesn’t pay your balance.  Instead, it just settles you monthly minimums, which means your total debt will barely even show any improvement.

While they may prove helpful when you do encounter problems, credit card insurance is generally not a great feature to take advantage of.  The potential benefits just doesn’t add up.