10 Things Not To Do With Your First Credit Card

You have just gotten approved for your first credit card and you’re ready to start using it. This is an exciting time in life, something that is almost a rite of passage in American society today. However, it’s also a time when you must start recognizing that you’re an adult who has to take your finances seriously. Many people make some big mistakes with their first credit card, mistakes which they end up paying for in the long run.

Here are the top ten things that you don’t want to do with your first credit card if you want to get off on the right foot with good credit:

1. Spend more than your credit limit. Make sure that you are aware of what your credit limit is so that you don’t go over it. This will help you avoid over-limit fees, keep your debt manageable and keep your credit in good standing.

2. Make late payments. This is one of the most common problems people have with a new credit card and you want to avoid it at all costs because it’s nothing but trouble for your finances and your credit rating.

3. Pay only the minimum balance. You want to try to pay off the entire card in full each month to establish good credit and keep debt under control. At the very least, you’ll want to pay as much as possible on the debt each month.

4. Live off of the credit card. You should never rely on credit when you don’t have an income to pay the debt.

5. Buy things that you don’t need. It’s tempting to use the credit card to make unnecessary purchases but you want to avoid this. Try to purchase only those items you would also buy if you only had cash.

6. Use it to help others. Don’t lend money to friends using your credit card because even if they pay you back, you’ve still paid the interest on the card for them.

7. Assume that this is just a trial card. Some people treat the first credit card as a “test it out” card and figure that their mistakes don’t matter. The reality is that this is going to impact your credit so you want to get it right from the get go.

8. Put yourself at risk of identity theft. Before you’ve gotten used to using a credit card, it’s easy to make mistakes that can put you at risk of identity theft. Don’t leave receipts lying around. Don’t lend your card to anyone. Don’t give out account information to strangers via phone or email unless you’ve initiated a purchase. Don’t throw statements in the trash without shredding them.

9. Go into the situation blindly. Really sit down and ask yourself why you want a credit card, what you’re going to use it for, what you need to do to be responsible with it and how you feel about the use of the card. Thinking through it helps you to make better decisions about using the credit card.

10. Be afraid to use it. Some people are so afraid of making the above mistakes that they end up avoiding use of the credit card all together. That won’t help you develop good habits so don’t be afraid to use it as long as you use it responsibly.

If you develop good habits with your first credit card then you can go on to much better use of credit cards and other loans over the course of the rest of your lifetime. If you develop bad habits, you’ll find yourself paying for them for many years to come.