If you are planning to get a credit card for the first time, there are quite a few things that you will need to consider. While a credit card can be very useful and beneficial for a number of reasons, it’s not something to be taken lightly. You need to be extremely cautious when going through this process. Those who rush into obtaining a credit card will undoubtedly regret it at some point. Many people have credit cards but don’t know everything they should about them.
Selecting Your First Credit Card
The first thing you need to do is to choose the right credit card, as there are many options available. You will want to find a card that matches your needs as closely as possible. If you buy from Amazon a lot, you might want to look for a card that is designed to give the most cash back for this site. Look at the details of each card so you will know which one is right for you. If you are a student, you will want to look for a card that is specifically for students.
You should also make a point of finding out what kind of interest rate each card comes with. Some cards come with a 0% introduction rate, but it’s only for a limited time. It usually lasts six months to a year. Once this period has expired, you will have to start paying interest on the money you owe. Shopping around for the right card will help you get a reasonable rate.
Don’t Charge More Than You Can Reasonably Afford
It can be easy to get carried away with using a credit card, but you need to keep yourself reigned in. You should never under any circumstances charge more than you can afford to your card. Think about this very carefully, especially before making a big purchase with plastic. Some people are better at others than doing this, and it does require a lot of self-discipline.
Paying Your Bills
The importance of paying your credit card bills on time cannot be overstated. You need to know when your bill is due and pay off as much as possible. A lot of people just pay the minimum amount on their cards, but this isn’t a good idea. You should always try to pay off your full balance, preferably before you even get the bill. This will help you improve your credit and keep it from getting damaged. Being even a day late paying off your card can rack up a lot of debt very quickly.
Look Out for Fees
It’s also important for you to pay close attention to the fees that each credit card comes with. Credit card companies make a ton of money on fees, so you have to be aware of this from the start. There will be fees for everything from regular purchases you make with your card to cash advances, and they are all different. Some things come with heftier fees than others, so you have to get these details.
Using Your Card for Cash
There are times where it can be tempting to use your credit card to get some quick cash, but it’s almost never worth it. Cash advances come with extremely high fees, even for those with good credit. If you need to borrow a significant amount of money, try getting a short-term loan from a private lender. Taking money out of an ATM with your credit card will cost you big time.
Check Your Statements and Credit Report
You will need to make a point of checking every credit card statement you receive for errors. These mistakes can happen from time to time, so you need to check your statements. If someone steals your identity and makes purchases with your card, you’ll want to know about it right away.
It’s also a good idea to take a close look at your credit report at least once every year for the same reason. If you spot a mistake on your report, you will need to contact the appropriate agency to let them know. Even one accidental negative mark on your credit can do quite a bit of damage. The sooner you catch these mistakes, the sooner you can get them resolved.
While credit cards can be immensely helpful in a lot of situations in life, they can also be your worst enemy if you are unprepared. Anyone who is getting a credit card for the first time needs to take these things into consideration. Even one seemingly small misstep with a credit card can have lasting negative effects. It is imperative that you are responsible with how you use your card so that you don’t end up in a spiralling pit of debt.