Successfully Managing Your First Credit Card

Successfully Managing Your First Credit Card

Congratulations on getting your first credit card.  Now, you are responsible for successfully managing your credit card.  Some difficulties face you, but with good habits you can create a positive credit history.

Whatever happens from here on will have enduring consequences for your credit history.  Let’s not mess up.  Here’s some sound advice.

o Your first credit card is not for fixing your financial woes.  This card is a tool to be used in establishing a good credit history to build on for future financial success.  When you make a purchase, pay before the due date.  Do not carry forward a balance, as higher interest rates will be attached to the balance.  Check your balances on-line and sign up for alerts to remind you when you need to make a payment.  Always pay on time.

o Do not apply for any more cards.  For the time being, you need only one single credit card.  Avoid the confusion and temptation of numerous cards.

o Take advantage of automatic payment options.  Set up an automatic payment account through your bank.  This way, you will never be late with a payment.  Always keep enough money in your bank account for the automatic payment to clear.

o Keep your credit limits low.  Don’t approve a high credit limit because it could tempt you to overspend and force you to carry over a balance.  High credit limits are also a temptation to minimum payments.

o Begin slowly, with small purchases.  You need to get used to using your credit card and to paying the balances in full when they come due.

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o Do not let anyone else use your card.  The reasons should be obvious.

o Your card must be used to remain active.  Do not lock it away somewhere.  Use your card for small purchases that you will pay in full before the due date.

o Do not use your card for cash advances.  The interest rates on cash advances are prohibitive.  If you need cash, get it out of your bank account.

o Create a spending strategy.  Your purchase, normally, should not be higher than twenty five percent of your net earnings a month.

o If you have big trouble with your credit card, discontinue using it and pay the balance fully.

Manage your finances maturely and it will help you succeed into the future.  Manage your finances poorly and your future is a bit less bright.  Blunt words, but true.