Personal Finance Advice

Congratulations.  You just received your very first credit card in the mail, and you are excited beyond belief.  This opens up a whole new world to you: The World of Credit Consumers.  Your first impulse is to run out and give the credit card a try.  You’ll only charge up a little because you just want to try it, and you’ll be sure to pay it all off when the statement comes next month.

Right?

Your first credit card is indeed a reason to celebrate.  This is the beginning of your credit history with revolving accounts, and it means that someone thought you are credit-worthy enough to merit an offer of credit.  It is exciting.  What you may not realize is that the way you handle this first credit card is going to have a huge impact on your credit history for years to come.  You’ll either look back on this as the beginning to your credit history or as a huge mistake that haunts you for many years down the road.

How can you make sure that this exciting moment doesn’t turn into a sour memory? Here are some things you need to know as you join the ever-growing group of people who utilize credit cards on a regular basis:

1.  Use it when you need it.  Your new credit card should not suddenly replace cash or your debit card as your main source of paying for purchases.  Use your card when you need to, but don’t get too liberal with it.

2.  Never, ever pay late.  You need to realize that a late payment not only results in huge fees, but the credit card company can (and probably will) raise your interest rate.  Don’t make this costly mistake.

3.  Don’t flirt with your credit limit.  You don’t want to max your card out.  You also don’t want to get so close to your limit that you don’t have much available credit at all.  This is bad for your personal finances, and bad for your credit score.

4.  It’s like a jar of pickles.  Maybe you’ve heard the saying, “It’s like a jar of pickles…once you get the first one out, the rest come out easily.”  The same can be said for credit cards.  Getting your first credit card may not have been easy, but now that you have one you’re going to get courted by other credit card companies.  Don’t make the mistake of accepting every card you receive a preapproval for.

Now is your chance to prove that you’re an adult.  Can you handle adult responsibility? Don’t allow your first credit card to become the catalyst for years of financial grief.  Instead, let it be the beginning of years of responsible credit usage.