First Time Credit Cards!

Welcome to our 'first time credit cards' guide! Do you know how to choose the best one for you or one that will best suit your needs? Do you understand the terms and agreements of your contract? How about what could happen if you don’t pay on time or rack up debts that you can’t pay?

Making sure you know the answers to these questions and others can make the experience of owning a credit card a positive one. All too often we hear the nightmare stories of overspending, living beyond one’s means, and ultimately bankruptcy, but being a responsible credit card owner doesn’t take a whole lot of effort - just a little understanding of how credit works.

It is important when first getting a credit card to know exactly what you are getting into. Make sure you start out by reading the terms of your service agreement. Credit card companies offer different interest rates, penalties, and incentives. Make sure you read the fine print when it comes to any additional fees or annual dues.

After reading through the service agreement check to see what your credit limit is at all times. This may change and going over your credit limit can cost you in penalties and fees. Most credit cards offer an online statement program so you can monitor your purchases or ask for monthly print outs to be mailed to you.

One of the most seductive traps of using a credit card is believing it can be used as a means of support. For example, some people use credit cards to pay for rent, car payments, insurance, and other expenses. This is one of the easiest and fastest ways to fall victim to credit card debt. Never make a purchase that you won’t have the means to cover by month’s end and avoid all unnecessary purchases.

When payments are due try to pay as much as possible. Paying the minimum monthly payments fulfills the basic requirements of owning a card, but you should try to pay more, even if it is five dollars over your minimum due. Ideally the whole balance should be paid so that you don’t accrue more interest and with more purchases the interest due will continue to increase leading you down a long and dangerous road of credit card debt. Missing payments completely could result in higher interest rates and ultimately negatively affect your credit rating.

Whatever you do, if you have credit card debt don’t ignore it. It won’t go away. Following these simple rules of owning your first credit card will keep you out of debt and on the road to perfect credit history.

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