4 Things You Need to Know Before You Get Your First Credit Card

Credit cards make shopping easy. You can buy whatever your want, whenever you need it if you have a line of credit. As convenient as they may seem, however, credit cards can be a cause of your stress and distress if misused and abused. So, before you excitedly submit that credit card application form to your bank, read these first:

  1. Make sure to pay off your balance

Overspending, missing payments or defaulting – bad credit habits can destroy your credit score. This is something you shouldn’t take lightly because poor score can have big financial costs in the future. It could prevent you from getting a home loan when you finally decided to settle in the future. It could also keep you from getting that dream car.

So, whatever happens, limit your credit spending to the amount you can afford to pay and, if possible, pay off your account balance every month. If you adhere to this basic rule in your 20s and beyond, you’ll be okay down the road.

credit card

  1. Check your credit report regularly

Unpaid bills, debts and even mistakes listed in your credit report could cause you to be turned down on a future loan application. Be responsible with your account by checking your credit report often. See to it that your personal information, debts and public records are correctly listed. You can get your credit reports at websites like my.bankrate.com.

  1. Just get one credit card at first

If this is the first time you’re getting a credit card, limit your plastic to one. Doing so will help you adjust to the idea of having a credit and practice managing your finances with a monthly bill to consider.

  1. Have an emergency fund to protect your credit

emergency fund

Emergency charges, such as medical bills and car repairs, can accumulate and, if you are not monitoring your credit report closely, your balance could build up and make payments difficult.

So, instead of relying everything on your credit card, work toward saving for an emergency fund.

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