How well do you know your credit cards?

In this June 15, 2017, photo, a customer inserts a credit card to buy gas in Haverhill, Mass. The more you know about credit cards, how they work and how they fit into your financial life, the more likely you are to use them wisely. (AP Photo/Elise Amendola) In this June 15, 2017, photo, a customer inserts a credit card to buy gas in Haverhill, Mass. The more you know about credit cards, how they work and how they fit into your financial life, the more likely you are to use them wisely. (AP Photo/Elise Amendola)

By Associated Press August 10, 2017 4 min read

Using a credit card doesn’t require much effort or experience. Swipe, insert or click and you can charge what you want within the credit limit. Understanding credit cards, however, takes some knowledge.

The more you know about credit cards, how they work and how they fit into your financial life, the more likely you are to use them wisely. Here are some common questions and answers about credit card basics.

HOW DO CREDIT CARDS AFFECT YOUR CREDIT SCORE?

Using a credit card has an impact on two of the biggest factors in your credit score: credit utilization and payment history.

-Utilization is the percentage of available credit currently used. If you have a limit of $5,000, for example, and a balance of $1,000, utilization is 20 percent. Utilization tends to have a negative impact on credit scores once it passes 30 percent.