5 Tips for first credit card users
Credit cards are powerful financial management tools. If you use them wisely, they will help you achieve your financial goals. But as the saying goes, with great power comes great responsibility. Abuse them and you will find yourself in a world of financial hurt. Check out these five tips that can help you find and use your credit card in a smart, financially- sound way.
1. Read the fine print
When searching for a credit card, make sure you compare cards rather than just applying for the first one you see. Eye-catching promotional headlines can be very appealing. But look at the details. You’ll especially want to watch for things like high annual, late fees, additional costs or rewards. Cards for first time users without much of a credit history may not have exceptional rewards, but it doesn’t hurt to look. You may be able to find decent cash back or mileage offers.
2. Pay the balance in full every month
Make sure you pay off your purchases at the end of every billing cycle. This way, you’ll avoid paying interest, which, if allowed to build, can dramatically increase the total cost of your debt.
3. Use it to build your credit
Remember when we said credit cards are a powerful tool? When you pay off your balances every month, you establish a positive credit history. You demonstrate to credit agencies that you can handle the responsibility of credit. This will become important when you want to buy a car, rent an apartment or even apply for a job.
4. Treat it like cash
If you don’t have the money now (or in the near future) to pay off the purchase, don’t put it on your credit card. You increase your risk of accruing interest and expanding what you owe (that’s how people get into debt).
5. Always check your statements
Unfortunately, credit card fraud is a very real thing. Check your statements every month to make sure there aren’t any unrecognizable charges. If you see a purchase that you didn’t make, report it to the credit card company right away.
Whether you are just getting started with your credit, trying to rebuild your credit or looking for a card that offers rewards, OnPath Financial Federal Credit Union offers a variety of credit cards. for you to choose from, plus diverse financial offerings, personal services and educational resources.