05 April 2009

How to Use Your First Credit Card

Have you recently acquired your first credit card? If you have, you may be excited. After all, there are a number of perks to owning a credit card. With that in mind, if you are not careful, your credit card could, literally, become your worst nightmare. To prevent yourself from falling victim to credit card debt, you will want to take the time to familiarize yourself with the proper use of a credit card.

When it comes to the proper use of a credit card, the most important thing that you can do is know what you are getting into. This can be done by thoroughly examining your credit card contract or your terms of services agreement. This can give you an idea as to what actions you should or shouldn’t take with your own credit card. You will want to be on the lookout for any additional fees, penalties, and so forth. By processing all of the information in your contract or terms of service agreement, you can not only know how your credit card should be used, but you also know the consequences for improper use.

If you are unable to find your credit card contract or terms of service agreement or if you are still left with unanswered questions, there are other steps that you can take, to reduce the likelihood of suffering from credit card debt. One of those steps involves knowing your available credit limit at all times. You will want to keep track of your credit card uses, as you would with a checking account. You should also be able to get updated information on your available line of credit by using the phone or the internet. Be sure to avoid going over your credit limit, as there are often costly penalties for doing so.
Limiting your uses is another one of the many ways that you can reduce your chances of falling victim to credit card debt. You are advised against using your credit card as a means of support. This, essentially, means that credit cards should not be used to pay for rent, car payments, and so forth. It is best if you use your credit card for emergencies only. Unnecessary purchases, especially those large in size, can increase your chances of credit card debt. It is important to remember that you will have to start paying your bill as soon as the following month. If you do not anticipate having the needed funds that soon, you may want to avoid making all unnecessary purchases.

Perhaps, the best way to avoid credit card debt is to simply pay your credit card bills on time. This is simple, yet so important. You will want to be sure to at least pay your monthly minimum balance. If you are able to pay more money, even just five dollars, you should go ahead and do so. The more money you are able to pay on your monthly credit card bill, the more money you will save yourself in the end. When it comes to credit card bills, the worst thing that you can do is avoid them. Missed payments often result in a higher minimum amount due. For many, this makes paying a credit card bill impossible.

The above mentioned tips are just a few of the many ways that you can properly use your credit card, to avoid credit card debt. If you have yet to receive a credit card, it is advised that you carefully choose yours, as this can also have an impact on your likelihood of falling victim to credit card debt. If possible, choose a card that you can benefit the most from, such as a credit card with low interest rates, balances transfers, or no annual fees.