How To Use Credit Card? full Tips for New Users: When you receive your first credit card, the feeling of happiness and accomplishment you feel is second to none.
Usually, the first reason to celebrate your first credit card is the financial freedom it gives you.
It’s like an endless shopping spree, an upscale dinner, an upscale spa treatment, a club membership and a gold ticket for your world.
Until your card statement arrives a month later, your unbridled happiness becomes your worst nightmare.
That’s when you finally realize how much you’ve spent – no worries in the world – now it’s time to spend money to pay the piper.
This is a story that is often repeated and has happened to many users who use credit cards for the first time in years.
But there are simple ways to prevent this from happening to you.
If you’re the first to use a credit card, check out the 12 simple tips to follow when using for the first time. We explain below how to use credit cards responsibly and minimize the risk trap of debt degradation.
12 simple tips for first-time credit card users:
1. Choose the right credit card
This is the first tip that the first credit card user should consider before starting to use your credit card.
In your excitement, do not mistakenly take the first credit card you provided.
Take a moment to think about it. Which card do you use?
Is it possible to pay your purchase invoices online? In this case, you need a card that can generate generous cashback when shopping online, or pay your fuel costs up, which offer low-interest rates. Will be more practical
Remember that two credit cards are not identical, you must choose the one that best suits your needs.
2. Opt for a secured credit card
If you are a student, choosing a secured credit card is a good way to regulate your monthly credit card spending and avoid falling into the debt trap.
Many banks offer these prepaid cards to students with low-interest rates and zero annual fees.
The parent / legal guardian deposits a certain amount on the student’s account in the card issuer.
If the student does not pay the amount due on the card, the issuer can use the funds deposited as collateral, making it one of the surest ways to use a credit card, especially for the first time. Time.
3. Stick to a budget always
For novice users, a credit card can look like a rich uncle who pays a bill. Get rid of this idea immediately. Although it may seem like this at first, there is no free meal in the world and your credit card bill will expire – do not get me wrong.
Therefore, you should use your credit card wisely.
One of the best ways to use a credit card is to track your costs and create a monthly budget for all content, including your credit card, and stick to it.
This way you are less likely to overuse or use a credit card. This way you are less likely to abuse or use your credit card.
4. Pay your bill on time & in full
Is the credit card bill received during the month higher than expected? No problem, you can pay the minimum amount and the balance at any time.
Never fall into this trap.
Although this seems like the most sensible way to use a credit card, especially if you run out of money, the truth is that’s not the case. The bank charges a high interest on the payment.
Late fees will be charged if your payment is delayed. The credit ratings of these two aspects will not be very good.
Therefore, it is recommended to pay your bills on time to avoid late payment of late fees, interest, and other fines.
5. Be mindful of a credit limit increase
In many cases, credit card companies are increasing the credit limit for credit card users who pay their bills on time – a subtle way to encourage paying users to spend more.
But that does not mean you have to spend more on credit cards.
For the sake of simplicity, your repayment ability remains the same – of course, unless you simultaneously get an extraordinary salary increase.
6. Never withdraw cash using your credit card
One of the best tips for credit cards is to never use your credit card to withdraw money.
When you need it urgently, you always want to withdraw funds from your credit card.
But you should know that, if applicable, these issuers will charge you higher cash withdrawal interest, as well as fees for ATMs.
Historical moral revelation
Using your credit card to withdraw money will quickly become your price.
Always try to carry the money you need. In case of emergency, please use the debit card associated with your bank account.
7. Never share your credit card details
From a security point of view, this is a very important credit card recommendation.
Sharing your credit card number and security data online or over the phone can significantly affect your financial situation.
This can make you a victim of credit card fraud – your card has been used for unauthorized purchases.
Before using any of your cards for online payments, make sure to use a secure website.
8. Pay attention to the details
Please check your monthly credit card bills – check all unauthorized transactions and check all applicable fees
For the first time, credit card users generally omit details and pay only the amount of the bill before they are disposed of.
It can be a dangerous habit and you risk getting more because of things you do not understand.
More importantly, if you want to have total control over your consumption habits, you must pay attention to detail.
9. Don’t shy away from asking for an interest cut
The interest charged by the credit card company on your bill is fixed, but if the customer makes a real demand, the interest can be reduced.
According to a survey conducted by CreditCards.com in 2017, 87% of credit card holders requested a reduction in late payment fees.
Similarly, the percentage of customers seeking lower interest rates and higher credit lines was 69% and 89% respectively, while 82% of customers were able to reduce or eliminate annual fees altogether.
10. Only Charge for Things you can afford
Who doesn’t like to buy good quality, expensive things? When you have a credit card, there is always an extra temptation to use it to buy the fancy things you want – but you can’t afford it forever.
But again, this can be a factor in the huge trap of financial debt.
Yes, it is perfectly normal to want good things, but only when you are sure you can pay, use a credit card to buy it.
Whether you have a credit card or not, life beyond your abilities is never a good idea. So try to limit your consumption habits.
11. Keep track of your credit score
The use of a credit card can affect your credit score in different ways, be it positive or negative.
For example, if you pay your credit card bill on time, you can earn more points and vice versa if you do not pay on time.
Because they are eager to get their first credit card, many novice users are misled when they apply for multiple memberships while on the road.
This can have a negative impact on your credit rating.
A low credit score will make you a category of at-risk borrowers – getting approval for a loan can, therefore, cause you problems.
12. Double-check your rewards
Many users who are using cards for the first time are also excited about receiving cash / free rewards for their personal purchases.
These rewards are usually paid by the merchant’s bank exchange fees paid to your bank – when you make a purchase.
These fees vary but are between 2% and more. Some card companies offer rewards of 5% to 6% on some purchases – but they are usually capped at a certain amount.
So, if the reward you get seems incredibly good, check the rules in the card statement.
Here are some helpful tips for new credit card users.
Getting the first credit card can be an exciting and fascinating experience for many people, but – having strong power will result in a great sense of responsibility.
Although it seems easy to obtain the first credit card, its use is a serious problem and must be managed responsibly.
Otherwise, your quest for financial independence will quickly become your worst financial nightmare.