Beginner’s Guide to Getting Your First Credit Card | The Northwest Star

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We’re here to help you break down the walls and help you have a better understanding of what you need to know before making that first card request. Photo provided

So, are you considering applying for your first credit card? There are a few things you need to know first. From bills to budgets to how to get a home loan, credit cards have a host of factors to consider before your purchase.

Many young people don’t learn the vital factors to keep in mind when it comes to credit, and so we’re here to help break down the walls and help you have a better understanding of what you need to know before you do this. first card application with some easy to digest advice.

Budget accordingly

Having your own credit card opens up a world of freedom when it comes to the purchases you can make. Now you can pay for more important things that might have been a bit expensive to pay upfront, like travel expenses or home repairs.

However, credit cards should not be confused with an endless cash outflow, you should only buy things with it that you could theoretically afford without. By establishing a realistic budget that encompasses your monthly expenses, you should be able to use your credit card responsibly and pay the repayments each month.

Pay your bill in full and on time

We have all been guilty of forgetting a bill or two from time to time, and leaving it until the last minute, or perhaps until it is late; However, paying your credit card bill on time is essential. By leaving it past the required payment date, you’ll end up racking up fees that can become unmanageable if taken too long. On top of that, it’s important to pay off your card in full each month.

When you receive your credit card invoice, it will allow you to pay the minimum amount required. This may seem easier because it breaks the amount you owe into smaller chunks, but the remaining unpaid debt will accrue interest and slowly grow to a much larger amount. This is why it is so imperative that you establish a budget. A budget keeps you accountable for how much you can actually afford to spend and means you’re not paying the minimum because that’s all you can afford.

Do your research on the benefits

Credit cards can be fantastic because they come with benefits. It’s essential to do your research to see which benefits suit your lifestyle and reward you the most. Many offer loyalty points every time you shop using the cards, which is great for a customer who wants to travel.

Alternatively, some will offer store discounts that are perfect for a family using a credit card for weekly groceries. Having a credit card offers a multitude of advantages and it is therefore essential to use them to your advantage. There are also alternative perks and rewards, and if you’re not sure what they are, they can always be explained to you if you speak to a customer service representative.

Don’t reach your limit

When you first buy a credit card it can be tempting to max it out, hitting your limit, after all there is a limit for a reason so why not hit it? But, it is a major contributor to harming your credit score. Having a good credit score becomes crucial when looking to take out a loan for things like a mortgage, and if your credit score is low you may become an undesirable candidate. Instead, opt to only spend around 30% to maintain a good credit score.

Grow your credit

When it comes to a good credit score, having a credit card can actually help you build up your credit, which is incredibly beneficial. Every month you make your credit card payments will positively impact your credit score, on top of that restricting the number of credit applications you submit will also impact your score like having multiple cards that all have high limits, this puts you at risk of accumulating debt, which would make lenders reluctant to give you a loan. However, if you use your card wisely, the opposite tends to happen, you have excellent credit and a higher chance of being approved for a loan if you choose to apply for one.

When you’re smart with your credit card, it can be a blessing. They can help you with unexpected expensive purchases, like plane tickets home or emergency home repairs, while boosting your credit score, which exponentially helps you in your future and offers you benefits and rewards along the way. So remember to be reasonable, make your refunds on time, and enjoy the loyalty points you receive while you wait.

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