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Credit cards can be a valuable tool in your financial toolbox. But like any tool, it can help you or it can hurt you.

Credit cards give you access to spending power without the need to carry cash. They can help you build your credit, which can help you get lower interest rates on mortgages and car loans. They can also give you rich rewards, like cash back or frequent flier miles.

They can also contribute to financial problems if you rack up a lot of high interest debt or miss payments.

Fortunately, there are a lot of ways you can get all of the benefits of credit cards while avoiding the drawbacks. Here are a few ways you can manage your credit cards like a pro so the drawbacks aren’t even on your radar.

1. Simplify Your Credit Cards

When I was younger, I carried half a dozen cards. I wanted to optimize my rewards to the fullest.

As I’ve gotten older, and hopefully wiser, I’ve realized all that complexity only caused me headaches and stress. For each card, you must remember to carry it, pay it off and remember which card to use at checkout every time. That’s a lot of complexity for not a lot of gain.

If you’re carrying more than two cards, consider reviewing your cards and paring it down to just two. You probably have overlapping rewards and where you don’t, the extra rewards you’re earning may not be worth the hassle of the extra cards. Remember that closing a credit card (particularly one you’ve had for a long time) can hurt your credit, so consider the consequences before you decide to close an account.

2. Keep Track of Your Spending

The biggest risk of credit cards is that they make spending money so deceptively easy: Swipe and you’re done. Most of the time, if the charge is small enough, you don’t even need to sign anything!

That’s why it’s important for you to maintain a budget and keep an eye on your spending. The best way to track your spending is to use a tool that automatically imports your charges from your credit cards.

3. Set Up Bill Pay

The days of paying your bills by check are over. Not only are checks insecure, mailing a letter costs you money and time that you could be using to do anything else!

For each of your credit cards, you can set up online bill pay to pay your monthly statement digitally rather than through snail mail. Online bill pay will reduce the friction each month and ensure the easiest path towards payment.

If you are comfortable with automatic bill pay, that’s even better. Automatic bill pay will automatically transfer money from your bank account to the credit card company. You need to make sure that bank account has enough to cover the payment!

You will still need to review your statements each month for fraud (or use transaction notifications) but automatic bill pay ensures you never miss a payment.

4. Use Your Rewards

If you have a credit card that gives you rewards, remember to use them! Periodically, companies will readjust how much each point is worth in their various “stores.”

In some cases, you’ll get ample warning. Sometimes you won’t. Avoid hoarding points!

For example, in March 2016, American Airlines adjusted their AAdvantage program and made certain reward flights more expensive. A SAAver-level business class flight to Europe now costs 57,500 each way, up from 50,000. If you had a credit card that gave you AAdvantage miles, you just took a haircut.

5. Activate Bonus Reward Categories

Some credit cards have rotating bonus categories that you must activate online in order to earn the rewards. Those bonus categories can give you big jumps in cash back or reward rates, so set a reminder for yourself to activate those bonuses.

For example, Chase Freedom has quarterly bonus cash back categories, but you must activate them to get the bonus cash back. Use whatever calendar system you use on a regular basis and set a reminder to log into your account and activate the bonus. Set it as a recurring reminder, every quarter, and you’ll never miss a bonus activation again.

These are just a handful of the ways you can manage your credit cards like a pro and maximize the benefits! Remember that your credit card use has a significant affect on your credit scores, so it’s a good idea to check them regularly. You can get two credit scores for free every 14 days on Credit.com.

At publishing time, the Chase Freedom credit card is offered through Credit.com product pages, and Credit.com is compensated if our users apply and ultimately sign up for this card. However, this relationship does not result in any preferential editorial treatment.

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.

Image: AleksandarNakic 

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