A Credit Card Guide - 7 Key Tips For Handling Your First Credit Card

Maybe you have just gotten your first credit card

, or you are a parent getting a credit card for your child before they move away to college. Either way, a credit card requires a certain degree of responsibility and diligence to use. Follow the tips below for some simple ways to stay on top of your first credit card account. ~ Perhaps you've recently received a credit card for the first time. Or, it may be that you want one for your child before they go off to higher education. In any event, a credit card demands a good amount of responsibility. Let's take a look at some easy steps to remain in control of that first credit card. ~ Are you seeking to get your first credit card? Make no mistake, you will need to exercise some restraint to keep from letting things get out of control with your credit card balance. Here's a few things you can do to keep things from getting out of hand with your first credit card.

1. Get to know all of the terms of your new credit card. Start with the interest rate, usually called the APR, or annual percentage rate. Next, review the fees that the card company charges if you make a payment late or take a cash advance on the card. Find out if the card company provides you with a grace period for payment past the due date before applying a late charge. Additionally, check to see if the card company charges an annual fee.

2. Don't sign up for a credit card just because the card issuer is offering a zero percent interest rate for a certain period of time. This deal makes sense in some cases, but more often, people end up charging a lot of purchases on the card, and finding that they cannot pay it off in time to avoid interest charges. Find out when the zero-interest period ends (it always does) and budget your charges and payments so that you do not have to pay any interest.

3. Use an online interest calculator to run a few balance scenarios. This is especially helpful when you are comparing different credit cards and cannot decide. Plug in a balance, such as $1,000.00. Plug in the card's interest rate, and calculate how much interest you would pay if you do not pay the card off right away.

4. Set a budget for your monthly credit usage, and stick to it. A credit card does not provide you with additional money, it just lets you use your money in a different form and build a credit history at the same time. If you can afford to spend $100 each month in cash for discretionary expenses, put no more than this amount on your monthly credit card.

5. Pay your credit card by the due date each month. You do not gain anything by paying it early; in fact the credit card company will earn a little extra interest off of your money. Just make sure to get your payment in by the statement due date.

6. Pay off the balance of your credit card each month. The purpose of the card is to build your credit history, so that you can qualify for other types of credit such as a home mortgage,financing for a car or your education. Showing that you can use your credit card responsibly, and afford to pay off the balance every month, will build you a great credit history quickly.

7. Never charge more than the credit limit for your credit card. Many credit card companies charge a fee, a higher interest rate or both when you exceed the card's limit. If you have an emergency and need to put a large purchase on your card, call the card company first to see if you can get a limit increase and avoid any extra fees.

Now that you know a few ways to successfully manage your first credit card, you can use it each month to build your credit history. A good credit record provides financial flexibility and can help you accomplish many of your personal goals and dreams.

by: Letha Roach

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