Four tips for managing your first credit card
Getting a credit card for the first time is exciting. However, you want to avoid becoming inundated in credit card debt. A report in USA Today states that overall, Americans hold an average of $3,600 in credit card debt. You want to fall well below that average.
To avoid debt throughout your lifetime, you should begin with a firm foundation. That means using your very first credit card wisely. If you are considering getting a credit card for the first time, then it is likely you are already familiar with using a debit card. However, you should bear in mind how to adequately use your new method of payment.
1. Stick with one for a while
For many people, getting one credit card is just the beginning; many consumers immediately go out to obtain another one. You should avoid doing this because it can hurt you in the long run. Use one credit card for at least a year before going out to get more cards.
2. Make payments on time
You never want to fall behind on credit card payments. Many banks make this easy by offering automatic credit card payments every month. You should consider signing up if you worry you will forget. Making timely payments also helps greatly with your overall credit rating.
3. Do not use it for everything
It is tempting to use a credit card for every purchase, especially if you get cash back. However, credit cards should really only see use on essential purchases. Paying utility bills is useful with a card. However, you should avoid using it every time you go out to a restaurant to eat.
4. Evaluate often
After one year, you should take a look at the terms and conditions inherent in your credit card. At this point, you should seriously consider whether you actually need another card, or if you merely want one. You may reach the conclusion you are better off handling one credit card that is easier to manage.