Getting your first credit card also means getting a new lifestyle. I bet you didn’t know this. But you will, just as soon as you complete your first online purchase or after you get your first discount or reward. A credit card opens up a whole new world for you, a world full of benefits, but also of risks.
If you’re worried, don’t be! By being smart and financially responsible you will be able to reap all the benefits of using a credit card, while staying well away from all unpleasant things. It’s all up to you. And, to help you out, here’s some advice that you, the new credit card holder, should always keep in mind.
1. Understand your new credit card
Before using it, you should find out your interest rate, fees and payment schedule. Play around, do some calculations and see how using your new credit card can affect you.
2. Always pay the monthly balance in full and on time
This is, by far, the most important thing that you need to remember. A credit card allows you to borrow money from your bank, to make purchases. This loan does not accrue any interest as long as you pay the money back within the agreed “grace period,” usually around 30 days. However, if you do not pay it within that time period, you will have to pay both the interest and the borrowed amount.
Credit card debt is one of the worst forms of debt, with high interest rates and large late fees. So be careful not to miss any payments. Things can quickly spiral out of control if you do.
3. Refrain from making any new purchases with your credit card if you believe that you won’t be able to pay the balance on time
As a new credit card holder, it’s better for you to take it easy at first and see how you adjust to the new lifestyle. Start by charging only one of your expenses, like groceries, and make sure that you pay everything in full each month. Afterwards, you can move to the next things.
4. Pay all your credit card debt back as soon as you can
Try to keep your debt under 30% of your credit limit and pay it back as soon as possible. Don’t spend money on other, unnecessary stuff and don’t pay other loans. Take care of your credit card first, as it can affect your credit history. Once you paid off your credit card debt, try to stay as far away from it as possible.
5. Protect yourself from those who want to steal your credit card data
Information theft is nowadays a common thing so, even though you might not believe it, you can easily become a target as well. Never give your credit card information over the phone to those who call and ask for it! Chances are it’s a scam. You can find out more information about the methods used to steal credit card data and what you can do to prevent it by clicking here.
6. Also protect yourself from your credit card providers
Your company might send you a check in the mail, encouraging you to use it and pay bills, or it might tease you with some 0 percent introductory rates. Ignore these offers as soon as you receive them. Or shred them, so that others can’t use them. Stay financially responsible, don’t overspend and you will be safe.