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9 Things to Remember When Using Your First Credit Card

Getting your first credit card is a significant financial milestone. After sorting through an endless array of program options and promotional offers, you made your choice, filled out the application, and saw those two magic words: You’re approved!

After the initial excitement wears off, it’s important to remember that just like your first car, your first credit card comes with a lot of responsibility. While it may be tempting to grab some friends to take the new plastic for a test drive, it’s a good time to exercise a little restraint. The financial decisions you make now will have long-term effects. Like a misspelled tattoo, it only takes a momentary lapse in judgment to make a mistake that will follow you for years to come.

So, before you start exercising your newfound financial freedom, here are a few tips to make sure your first credit card experience is positive:

  1. Pay attention to the fine print.
    Even if you don’t need readers, you may want to have some handy. Companies like to sneak stuff in the small print. Introductory interest rates can be attractive, but once those offers expire, you could be left paying higher interest on your purchases.
     
  2. Don’t be a card counter.
    If you have multiple cards, it can be tempting to spend more than you intended. Also, it makes your wallet fat which makes for uneven seating and back problems down the line. Simplify your life, stick to a single card, and keep the credit limit sensible.
     
  3. Consistency Pays Off.
    This simple step will help you avoid additional interest charges, and it’s an effective way to build an excellent credit rating.
     
  4. Always pay your bill on time.
    Late payment charges are usually more expensive than your minimum payment, which can make it hard to keep up with your bill. If you’re worried that you’ll forget the due date, most cards offer an automatic payment option. Use it.
     
  5. It’s your budget, don’t fudge it.
    Try to think of your credit card as for emergencies only. Do your best to continue using your checking account or cash to cover everyday expenses. Your credit card is like that friend you call when you need help moving or a ride to the airport. There when you need it, but not to be overused.
     
  6. Steer clear of cash advances.
    These advances usually charge a higher interest rate than regular credit card purchases. The convenience isn’t worth the cost.
     
  7. Keep your monthly credit card payments less than 20% of your income.
    Once your bill exceeds that amount, it becomes exponentially more difficult to stick to a sensible, reasonable budget.
     
  8. Review your credit card statements each month.
    In addition to being a smart way to track your spending, regular monitoring is the most effective way to combat credit card fraud and identity theft.
     
  9. Be honest with yourself.
    If you find that your spending gets out of hand, there’s no shame in putting your credit card away (or getting rid of it all together) until you correct your bad financial habits.  

Credit cards can be useful tools for emergencies, and when used properly, they can help you maintain a strong credit rating. But with so many card options available today, it is essential to choose the one that’s right for you. If you haven’t secured your first card yet and are wondering where to find a trustworthy offer, St.Lawrence Federal Credit Union offers carefully selected credit card programs. That’s a great place to start.