So You Got a Credit Card, Now What?

It's incredibly important to have good credit and build a solid credit history. Use these tips to help manage your credit card and build credit. 

1. Create a monthly budget 

Before you begin using a credit card, make sure you have a budget in mind. Make a list of monthly income and expenses and be sure they will even out.  

2. Exercise caution. 

Having a credit card means you have the ability to go out and buy a bunch of things right away. Don’t. Stay well below your credit card limit because your credit score will go down if you continue to stay close to your limit. 

3. Pay on time. 

The best way to improve and keep up your good credit is to demonstrate you are a responsible individual. 

4. Pay more than the minimum amount due.

Your APR determines the actual cost of your purchases, not necessarily the price tag. Paying the full amount each month will not accrue interest, but making minimum payments will add interest to your unpaid balance. Each month this compounds so you will pay interest on the interest charges from previous months. The actual cost of your purchases may balloon far beyond their true value.

5. Grace periods or low interest?

When selecting a credit card, grace periods are only helpful if you pay it off every month. A low interest rate is usually better.

6. Avoid cash advances or courtesy checks. 

These may seem attractive, but the interest rates are so high, you may end up in even more financial trouble. 

7. Use your credit card regularly. 

Credit accounts that go unused may be closed by issuers after a period of time. Closed accounts can adversely affect your credit

More resources

Money Matters | Pacific Magazine, Spring 2015
Adulting 101 | Pacific Magazine, Winter 2017
Dollars & Sense | Pacific Magazine, Winter 2017