How To Make The Most Of Your First Credit Card

How To Make The Most Of Your First Credit Card

Once you get your first credit card, it’s easy to assume that it’s time to start making as many purchases as you like until you reach your credit limit or even exceed them.

The independence and convenience of shopping with a credit card often triggers the urge to start buying – especially when it’s your first credit card.

I hate to tell you this, you won’t make the most out of your credit card if you start that way. But if you do things the right way, you can use your first credit card to build credit and enhance your eligibility to obtain loans in the future.

But how exactly can you do that? I’ll show you several key things you can do to make the most out of your credit card.

How To Get The Most Out Of Your First Credit Card

Use Your First Credit Card Smartly

One of the most effective methods you can use to build a strong credit history is to avoid spending beyond 30 percent of your available credit line. This means you have to be careful about your spending.

If you end up using your card as instant cash, you’ll burn through your available credit in no time. Rather than do that, you should keep your card for planned purchases. So you should take your time to track down the best deals and ensure that you have a strategy to pay off the purchases before you start swiping.

Always Pay At The Right Time

Since it’s your first credit card, odds are you may not be fully aware of the outcome of making late payments.

As soon as you missed just one payment or make one late payment, it can trigger late fees and interest charges.

That said, late payments can harm your credit score.  

Pay Your Balance In Full

One of the easiest methods of stopping debt accumulation is to always pay your balance in full. However if you’re unable to pay the entire balance, you should pay more than the minimum payment due to save you from interest charges down the road.

This is one of the key methods of making the most out of your first credit card.

Find Out What Your Credit Score Is

Whenever you apply for a loan, one of the first things your potential lender will look at is your credit score and then your credit history.

Your credit score is a measure of your credit worthiness and how likely you are to pay back. So the higher your credit score, the higher the possibility that you’ll be approved for a credit card. Also, the higher your credit score, the lower the interest rates you’ll have to pay.

That said, if you have a low credit score or no credit history at all, a good place to start is with a secured credit card so you can start building your credit history.

Monitor Your Credit Score

Once you start building your credit via your first credit card you should start monitoring your credit score.

The three major credit bureaus (TransUnion, Equifax and Experian) responsible for tracking your credit history are mandated to send you a free credit report once in a year. But you’re expected to request for it to have it sent to you.  

So rather than ask from all three at once, you should consider asking from each of them quarterly (every 4 months) so you can monitor your credit score all year round.  

Monitor Your Account

It’s a smart idea to keep track of your credit card spending. One of the most effective methods to do this is online or through your credit card’s app.

When you access your account online, you get a real time access rather than waiting for a monthly paper statement before you can review activities on your account.

Monitoring your account gives you the opportunity to review your spending habits and identify important reasons to cut back.

Depending on who your credit card company is, you may receive automatic alerts whenever you make a transaction so you can monitor your account and spending easily.

Some of the alerts you’ll get include when your spending is close to your total credit line, when your bills are due, when you make purchases etc.

Protect Yourself From Scams

Once you start monitoring your credit score and spending, it is also important to monitor your accounts for suspicious activities.  

It’s also crucial to know the right steps to take as soon as you find a suspicious activity on your account. Start by reviewing your bank’s privacy and security policies to figure out the level of protection they offer in the event that your credit card is stolen.

Aside that, you should never give out your credit card number over the phone except you’re the one that made the call. You should take some time to memorize your PIN and password and never write them down where anyone can see them.

You should also check your account regularly and be on the lookout for unusual activities. And once you observe that your card is missing, call your credit card company immediately.

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