By Lois Guchu


5 Min. To Read

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Some people learn about credit cards and how to manage their spending at a very young age, but most people get their first exposure to swiping plastic on a regular basis after high school when they’re out in the world on their own for the first time. You’ve probably noticed that having a credit card can help you cover expenses and make purchases when you don’t have cash, so you might be thinking about applying for one. Before you become one of the 195 million Americans who uses credit cards, consider these tips to help you choose the right card and use it to your advantage.

Credit card applications are everywhere, so take some time to think through the many offers at your fingertips. If you’re in college and plan to use a credit card to pay for everything from gas to takeout, for example, you might benefit from having a card that gives you cash back as a reward. You might be taking a gap year to see the world, in which case, a travel rewards credit card might work best for you.

As a first-time credit card user, you may not have a lot of money, so it’s a good idea to scrutinize credit card offers for details such as how much money you have to spend to get rewards and what you have to do to claim them. These details usually are in a credit card application’s fine print, so it’s a good idea to know what’s involved in amassing and claiming awards before applying.

It’s true that having a credit card and good credit scores that reflect responsible usage can help you build a bright financial future. That future can slip away easily, though, if you rack up more debt than you can pay off at the end of every month. For a credit card to work to your advantage, keep your spending under 30% of the limit and pay off the balance every month. So if you have a credit card with a $1,000 limit, you don’t want to charge more than $300 on it. Keeping your usage low boosts your credit score and makes paying off the balance manageable. By contrast, carrying a balance is risky because any additional spending you do beyond 30% of the limit can have a negative impact on your credit score and cause you to sink deeper into debt.

So you know you’re supposed to keep your usage of a credit card under 30% of the credit limit to keep your credit scores up. The major credit bureaus consider your credit limit to be the sum of all your credit card limits, so it’s important to keep this figure in mind as you apply for more credit cards. For example, if you have three cards with credit limits of $1,000, $2,500, and $4,000, your credit limit becomes $7,500, and your usage shouldn’t exceed $2,250. While you might calculate the benefits of having more credit cards, to keep your credit scores up, you’ll need to keep close track of your usage on all of them, which can be challenging.

You might be paying more interest on your credit card than your buddy pays, or credit card issuer might have added $30 to your bill because you paid it one day late. The good news is that if you call and ask for a lower interest rate or a fee waiver, you just might get it. While around 80% of credit cardholders don’t think they’ll be successful asking their credit card issuers to do them a favor, a recent survey by showed just the opposite is true. The survey shows that an eye-popping 89% of brave credit cardholders who asked for late fee waivers got them, and about 75% of those who asked lower interest rates got those, too. Asking for a better deal lets you keep more of your hard-earned money in your pocket, so call and ask for one.

Using your first credit card responsibly can open many financial doors to you. A credit card can be a benefit to you as long as you develop and maintain conservative spending and paying habits early on.

Before you become one of the 195 million Americans who uses credit cards, consider these tips to help you choose the right card and use it to your advantage.

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