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10 Tips For First-Time Credit Card Users

Having a credit card can actually help build your credit! You just need to make sure you’re using them correctly. Here are some tips on how to do your first time applying for a credit card:

1. Don’t rush into it

  • Don’t apply for a credit card just because you want to get one. If that’s the case, go ahead and get a debit card instead.
  • Think about why you need a credit card and what its purpose will be before applying.

2. Do the research

There are many different types of cards, with varying annual fees and rewards programs. When you’re considering which one is right for your needs, it’s important to understand how much each will cost you.

3. Understand your credit score

A credit score is a three-digit number that represents the likelihood that you will pay back the money that you borrow. A high score typically means a good history of paying bills on time, while a low score doesn’t necessarily mean bad behavior. It just means there are some red flags in your past.

4. Consider a secured card

If you’re new to credit, or you have a spotty credit history, it might be difficult to get approved for a traditional unsecured card. However, a secured credit card is one option that can help build your credit score and make it easier for you to eventually qualify for unsecured cards.

5. Select the right card for you

It’s important to select the right card for your spending habits. If you’re a big grocery shopper and travel frequently, then a cash-back credit card might be the best choice for you.

6. Think about how much a rewards program matters to you

Rewards programs are one of the main reasons you want to get a credit card in the first place, but it’s important to think about how much a rewards program matters to you.

7. Be aware of fees

If you opt for a card with a high APR and carry a large balance, you may be charged $15 or more each month in interest charges. As professionals like SoFi say, “From annual fees, to foreign transaction fees, to late fees, all credit cards have some fees that cardholders need to be aware of.”

8. Get the right card for your lifestyle

Choosing a card that matches your spending habits is key to making sure you get the most out of it, so don’t be afraid to do some comparison shopping. If you tend to carry a balance from month to month, look for cards with low-interest rates and monthly fees. If you pay off your balance in full every month, go for rewards and perks instead of saving money on interest charges.

9. Know your limits and set up purchase alerts

  • Set up purchase alerts on your credit card account.
  • Set up alerts with the major credit bureaus as well.

10. Pay off the balance in full every month if you can, or at least pay more than the minimum due

If you have a large balance on a credit card, it may not be possible to do this. But if you can afford to do so, paying off your balance in full will allow you to avoid interest charges and prevent debt from building up.

There are a lot of things to think about when you’re getting your first credit card, but don’t let it overwhelm you. Take your time, do your research and find the right card for you.

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