First Credit Card, How to Use
First Credit Card, How to Use

Getting your first credit card is a huge step toward building the credit you need later in life. By using your new credit card responsibly and wisely, you can begin to build a valuable credit history and learn new habits that will benefit you for decades to come.

You should make sure you have a plan to help you get the most out of your first credit card while avoiding the major pitfalls of plastic. It’s no secret that too many people get into financial trouble with their first credit card — either by piling up debt or by falling behind on repayments that hurt their scores.

If you’re excited about your new card and want to make sure it’s used to your advantage, here are the steps you should take now.

Use your card only for purchases that you can afford and can pay for right away

Because of the high interest rates that credit cards charge, they are rarely the best option when you need to balance more than a month. After all, the average interest rate on all major credit cards right now is just under 17%, and many entry cards have rates even higher.

With that in mind, you should only charge for purchases that you can afford to pay off immediately, and avoid “washing” purchases with plastic entirely. Also, try using your credit card and a monthly budget or spending plan.


Get into the habit of paying the balance in full

Loading only what you can pay also paves the way for paying off your credit card balance in full each month. This step will not only help you avoid paying credit card interest, but it will also help you avoid a growing debt balance.

Most experts recommend keeping your credit utilization below 10% (or up to 30%) for best results.

Set up automatic payments

As we mentioned before, your payment history is the most important factor in determining your FICO score, so you need to make sure you never pay your credit card bill after it’s due. If you’re worried about forgetting, consider setting up automatic payments that will be debited from your bank account on the due date of your credit card statement.


You can even set up automatic payments so that only the minimum payment amount is automatically paid. This won’t help you move your balance from one billing cycle to the next, but it will help you avoid late fees and APR penalties.

Spend to get rewards

If your new credit card offers cash back or bonus points on your purchases, take advantage of those benefits without putting yourself at risk. For example, make sure you charge for purchases that fall into one of your card’s reward categories, but don’t overspend to earn rewards.

Also, try to meet any minimum spend requirements you need to meet to receive your sign-up bonus. Just don’t buy things you don’t need to meet the threshold.

The rewards aren’t worth it if you end up balancing. With most cash-back credit cards offering repayments of up to 2%, and with current credit card rates hovering around 17%, it’s easy to see that chasing rewards in debt is a losing proposition.


Familiarize yourself with the benefits of credit cards

Also, learn about any benefits or features your credit card offers, such as: B. Extended warranties, purchase damage or theft protection, or travel insurance benefits.

Knowing the benefits your credit card offers puts you in the best position to take advantage of them. Remember that most benefits require you to pay by card first. For example, you can only get travel insurance benefits for travel that you pay for with a credit card, while purchase protection only applies to items you pay for with a credit card.

Monitor your credit score

Finally, be sure to monitor your credit usage and progress in the credit building process. This allows you to spot problems as they arise, and monitoring your credit score can also help you spot signs of identity theft or fraud.

Fortunately, many credit card companies allow you to get a free credit score on your monthly credit card statement. Programs like Capital One’s CreditWise and Chase’s Credit Journey can also help you track your credit score and overall creditworthiness for free.

Final result

Getting approved for your first credit card can be an exciting time, but you should make sure you have a plan to maximize the experience. By using your credit card consciously, avoiding long-term debt, and taking advantage of the rewards and benefits of your credit card, you can earn more and start building positive credit habits that can last a lifetime.

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Jake Smith

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Jake Smith

He is the editor of Eragoncred. Previously, he was editor-in-chief of Eragoncred and a financial industry reporter. Jake has spent most of his career as a Digital Media journalist and has over 10 years of experience as a writer and editor.