9 Best Tips For First-Time Credit Card Users

Building a high credit score is a long-term game, but the effort can be well worth it when you enjoy quick approvals and low-interest rates on cards and loans in the future. Credit cards are fun and highly convenient as you can purchase things you want whether you can afford them or not. However, without proper information on credit cards & building credits, it’s easy for first-time credit card users to make costly mistakes.

Make Your Payments On Time & Every Time. 

First-time credit card users should opt for automatic payments for at least the minimum monthly payment. This will ensure you don’t miss making a payment, even at your busiest. And if you fall a little short of your full balance one month, ensure to at least make a minimum payment before your next due date. 

Know What To Charge And What To Avoid.

Credit Card Company often treats purchases that could be considered a cash equivalent, such as lottery, tickets, bets, or money orders. Cash advances come with transaction fees and accrue interest the second they hit your account.

Beware Of Fees. 

Besides annual fees and interest fees, credit card issuer charges other fees such as late fees. You will be charged late fees if you ever make a payment after the due date. Also, balance transfers nearly always come with fees; usually, a percentage of the transferred balance and cash advances are equally charged a transaction fee. Most cards will charge a fee if you purchase in foreign currency.

Check Your Credit Reports Yearly. 

Your credit report records details of your debts, repayment history, and current credit accounts, including credit cards. For first-time credit card users, you certainly will have a limited credit history, but checking your credit reports once a year is essential. 

Look Out For Warning Signs. 

One simplest way for first-time credit card users to stay on top of their credit scores is by owning a new card. And interestingly, most credit card issuers now offer free score tracking, and many offer monitoring and score alerts. It’s worth knowing that as your credit balances rise and fall and your utilization rate changes, your score will, too.

Check Your Statements For Problems. 

Fraudulent charges on credit cards aren’t uncommon, so even a small unauthorized charge of a few cents should be reported. Reporting fraudulent purchases will help the issuer stop the fraud and also help ensure you aren’t paying for things you didn’t purchase. If your issuer has a $0 fraud liability policy, you won’t pay for anything you didn’t buy. 

Choose Your Cards Carefully. 

For your first credit card, you’ll certainly have limited options. But so far, the best is the Student Credit Cards, as they can offer good rewards. And if you’re not a college student, you should consider a secured credit card – they are just like any other credit card, and some even offer purchase rewards.

Avoid Making Minimum Payments. 

As a first-time credit card user, avoid the interest-fee trap and only use your credit cards to buy what you can afford and repay monthly. The bitter truth is that minimum payments won’t help you pay off your balance promptly but will help your card issuer make money on interest fees. 

Only Charge What You Can Afford. 

First-time credit users can be tempted to go shopping spree, but spending beyond your means is one quick way to wind up drowning in debt. If you don’t have the money in the bank to pay for a purchase, don’t put it on your credit card. It’s best to treat your credit cards like debit cards.