Whether you’ve just become an adult and are looking to get your first credit card in order to build your credit or you’re someone who’s been avoiding credit cards thus far in your life, getting your first credit card is a big deal. So many things in this life rely on your ability to point to your credit score and your good credit record, and having a credit card can help with these things. However, credit cards can also become a slippery slope if you’re not careful.
So to help ensure that you make the right choices for your financial future, here are three things to consider when getting your first credit card.
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Understand The Terms Beforehand
When comparing credit cards, you’ll want to spend a decent amount of time looking at the terms of the credit card before you make your choice.
When speaking of the terms of a credit card, this means things like what the annual fee is that you’ll pay each year, what the annual percentage rate (APR) is, which is how much interest you’ll be paying on your balances, what late fees you could incur on late payments, and how much you’ll pay in fees if you use your credit card in a foreign country. Depending on how you plan to use your card, the importance that you’ll place on each of these terms will vary. But to make the credit card most worth your while, make sure you’re comfortable with the terms given to you.
Have A Plan For How You’ll Use Your Card
While having a credit card may make it easier for you to make certain purchases, many people find that it’s easy to let this access to money and credit get out of control. So to keep this from happening to you, you should have a plan for how you’ll use your credit card.
Ideally, you should try to keep the amount of credit you’re using to a minimum. As a good rule of thumb, you should try not to use more than 30 percent of the credit you have available to you. This will help you keep your credit score high and not get buried under too much debt.
Get A Card You’ll Want To Hold Onto Forever
One thing that can have a big impact on your credit score is how long your credit history goes. The longer it is, the better it will be for you.
Knowing this, you will want to keep your first credit card open for as long as you can. Ideally, you should try to never close this account so that your credit history can be as old as possible. So since you’ll want to hold onto your first credit card for essentially forever, you’ll want to be sure that you’re choosing the right card for you, both now and in the future.
If you’re going to be getting your first credit card soon, consider using the tips mentioned above to help you pick the right and best card for you.