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Paying with plastic has its benefits. Learn how to use a credit card to maximize its perks, points, and insurance benefits while minimizing interest.

It's not exactly a new revelation that getting a credit card can make your financial profile stronger. However, the switch from cash or debit to credit is about a lot more than what you hand the cashier. That piece of plastic can be a powerful tool, and learning how to use a credit card to its full potential can be a pivotal point for your money management skills.

Most importantly, good credit card habits will help you build your credit score. A high credit score makes certain financial processes a whole lot easier, from getting access to the best interest rates to getting approved for an apartment. If you're considering applying for a credit card to make your financial future that much brighter, here's everything you need to know.

A credit card is only a benefit if you have a good relationship with your spending. Otherwise, your shiny new financial tool can quickly turn into a burden. How do you make sure that doesn't happen? Try these three key money habits.

When you use your credit card to make purchases, you're then responsible for paying it off. Each month, you'll receive a statement outlining how much you've spent on your card and how much you need to pay off. Paying off the entire balance each month will help you avoid costly interest charges, but if you can't afford that, at least make the minimum payment to prevent a ding on your credit score.

Your credit card's limit is the maximum amount of debt you can carry at one time. Your limit will usually be between $1,000 and $10,000. You shouldn't spend right up to your credit card's limit, though. Getting too close to the limit will negatively affect your credit score due a calculation called your credit utilization ratio.

Your credit utilization ratio is a measure of your credit card balance against your total credit limit. To maximize your credit score, keep your credit utilization ratio below 35%. For example, if you have a credit card with a $10,000 limit, try not to carry a balance higher than $3,500.

Choose a credit limit that accurately reflects your spending habits. If you only plan to use your credit card for occasional purchases and online shopping, a few thousand dollars should be enough. If you spend thousands of dollars per month on it, pick a higher credit limit to keep your credit utilization ratio in check. Be realistic about how you'll pay it back, as well. If you know that you occasionally carry a credit card balance and incur interest charges, choose a smaller credit limit to minimize the monthly interest you'll pay.

Healthy credit card habits should be at the foundation of how you use your card. But if you really want to get the most out of your new plastic, take advantage of the points, perks, and insurance coverage that come with many credit cards.

If your credit card lets you earn points when you spend money, you can redeem them for things like travel, merchandise, and gift cards.

Make your points go even further by redeeming your points via your credit card's preferred method. While you can make your purchases normally and use your points to foot the bill, many credit card providers offer an online portal where you can redeem points. The first option seems simpler, but often your points won't be worth as much that way. Call your credit card provider to confirm. 

Most credit cards come with some kind of perk. Common benefits include a 24/7 concierge service, early access to concert tickets and dining events, and free airport lounge access, but read your cardholder agreement to figure out what perks your credit card is handing out.

Beyond the usual perks, your credit card may also offer complimentary insurance coverage for any purchases you make or travel you book. You may see credit cards that boast car rental damage waivers, baggage loss and delay insurance, emergency medical insurance, trip interruption and delay insurance, and extended warranty coverage. If your credit card has any of these types of insurance, you could save hundreds of dollars in insurance coverage.

Credit cards can open up plenty of doors for those interested in improving their financial health. Whether you're learning how to use a credit card for the first time or looking to get more out of an existing card, embrace healthy credit card habits — they'll only serve you well.