7 Tips For First-Time Credit Card Users..

Best Advice about Credit cards

If you’re new to credit cards, you may be surprised to learn that you can actually start your credit journey at 18 years old — the minimum age requirement for opening your first card.

While financial experts recommend you start building credit as young as possible, not all beginners are the same. Below, Select rounds up seven (perhaps surprising) tips for newbies no matter how old you are.

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1. Your first step in building credit may require you to make a deposit

Credit cards work by issuing you a line of credit that you can use to make purchases. You are then required to pay back the loan — ideally in full at the end of each billing cycle (so you don’t accrue interest). But because you are just starting out, credit card issuers prefer to have a way to pay back your credit line until you prove a history of trustworthiness.

2. Shop around before you apply

Credit card issuers are required by law to disclose on their website their interest rates and fees, such as annual fees and foreign transaction fees. Before you decide what to sign up for, you’ll want to take full advantage of this information and learn the ins and outs of any card that catches your interest.

3. Pay your bill on time, in full (not just the minimum) and you’ll never pay interest

You may have felt intimidated by credit cards’ high interest rates, also known as APRs, but as long as you pay your credit card bill on time and in full, you won’t ever have to pay them.

4. Use up very little of your credit limit

Spending below your credit limit is an essential step toward reaching a good credit score. The rule of thumb is to not spend more than 30% of your credit limit (some experts even suggest having a 10% threshold). This percentage is a common credit card term called your credit utilization rate.

5. Constantly review your credit card charges

It’s important to report unauthorized credit card charges as immediately as you can so you aren’t overcharged, but you are already much more secure with a credit card than you would be using a debit card when it comes to fraud liability.

6. Don’t be afraid to actually use your credit card

Keeping a $0 balance on your credit card won’t do you (or your credit score) any good. Lenders and credit card issuers want to see how you use credit so it is important you make purchases on your credit card. Keeping it active will also prevent your issuer from closing it on you.

7. Think twice about ever canceling your credit card — especially your first one

Your first credit card will have a big impact on your credit history. And as long as you use it responsibly, that impact can be very positive. Credit cards not only let you afford the basics, like everyday expenses, but they can earn you rewards when you charge and help you qualify for lower interest rates on loans.