How to Spend Wisely With Your First Credit Card

Having a credit card for the first time can be a very exciting experience for anyone. Whether you’re a student, a graduate or an employee, owning a credit card has its thrills. Nevertheless, we should not forget the responsibilities that come with it.

So if this is your first time to have credit card, this article was written for you. Here, we have presented suggestions on your how you can use your credit card wisely and how to stay out of bad debt or bad credit.

How A First Time Credit Card Holder Can Spend Wisely

Spend only the money you have. Yes, you can charge anything you want to your card. But remember, you need to pay it back on time or you could be in great danger. Before using your credit card on your shopping, ask yourself the following questions and know the answers for sure:

Is this item really that important for me?
Do I need to buy it now?
Will I be able to pay off the balance in full?
Will I be able to submit my payment before my due date ends?

Pay back your balance in full at all times. Paying off your balance in full is crucial. If you’re in the habit of submitting only the minimum due payment and carrying over balances from one month to the next, you end up paying more than the actual worth of your purchases. Why do we say this? The average APR ranges at around 12% to as much as 20%. Imagine paying 20% more of your total balances just because you didn’t submit your entire payment at once.

Don’t use your credit card just to earn rewards. Do you own a reward credit card? If yes, it may be tempting to charge more purchases on your account for the sake of collecting more points. But you need to be realistic about it. Will the rewards you earn be worth the expenses you’ve made?

Take note that credit cards with rewards often have higher interest rates than their non-rewards counterparts. The interest rates on reward credit cards range from 15% to 20% depending on the issuer. If you need to pay such a high interest rate, do you think the rewards you earn are still worth it? Or does the APR offset the value of your rewards?

Even if a credit card seems to have an attractive reward program, if you can’t handle your account correctly, you could still end up to be on the losing end. The best way to use reward credit cards is to avoid the interest rate altogether. You can only do this by paying off your balances in full each month. If you can’t stick to that rule, you may be better off with non-rewards card.

About the Author

Samantha Wilson is a consultant for credit cards for students. For years she has written student credit cards articles that would help build student credit.
Copyright 2009
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2 comments for “How to Spend Wisely With Your First Credit Card

  1. claire roberts
    April 19, 2009 at 11:49 pm

    This is a great article since I’m a student and planning to apply for student credit card.

  2. bbc4ss
    April 20, 2009 at 1:04 am

    @ Claire

    Thanks for the comment Claire, for the list of student credit cards, you can visit this page:

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