Nowadays a credit card has become an indispensable element of our lives. And if you are just starting on your credit journey, it can be both, exciting and scary. The impact of your first credit card on your credit history will be significant. However, if you utilize it appropriately, the outcome can either be quite pleasant or it could result in a huge quantity of loans that will take several years to pay off.

Tips For Getting a First Credit Card

Below are a few pointers to help you make the correct decisions before using your very first credit card:

Know the terms:

As it is your first time using a credit card make sure you know and understand the terms that are frequently used, like APR, interest rate, grace period, annual fee, joining fee, credit utilization ratio, etc.

Understand your wants and demands:

The most important thing is to figure out your needs and requirements while using a credit card. Usually, the convenience offered by credit cards blinds the users and they start to spend blindly on things they do not even need. You must understand that at the end of the period you have to pay the full amount back to the issuer plus interest on that sum.

Pay bills on time:

This is a rule by which you must stick. Your bills should be paid fully and on time. You should be capable of managing your funds given that you have a credit card in your possession. Making late payments or missing them will not shed a good light on your creditworthiness. Your credit score will consequently decline even before it reaches a good number.

Set a budget:

Setting a budget will not only help you eliminate your extra expenses but will also help you stay under your credit utilization ratio, which will eventually result in your credit score to raise

 Accumulate and use your rewards:

You will accrue rewards in accordance with your credit card’s reward policy. Although earning rewards while making purchases you want is fun and addictive, keep in mind that most reward points have expiration dates and should be used before that date.

Make use of automatic payments:

As you are just a beginner who is using your first credit card, it can be a little hard to remember the due dates for payments, and as your credit history is just beginning to form you should not take any risks regarding them. A late payment can damage your credit score and remain on your credit report for up to seven years, which can also hurt your credibility.

Benefits offered:

A credit card comes with various benefits therefore it is very important to know all the benefits that your credit card has to offer if you want to enjoy the offered perks to their fullest. Most of the best credit cards also come with fee waivers where you have to reach a set limit of spending to waive off the annual fees for your card.

Examine your credit report:

Even well-known users tend to overlook this, but you should always check your credit report since it will show you where your money is going and alert you to any transactions that may have been recorded incorrectly.

BOTTOM LINE:

Even though having a credit card is thrilling because of all the rewards and benefits it offers, it is crucial to keep the aforementioned considerations in mind and use it wisely while exercising discipline. Credit cards can either become a boon or a doom for you, it depends on you, and how you play your cards.

Read More: How to Avoid Credit Card Interest Rates?