On a Budget: How to Manage Your First Credit Card
Having your first credit card can be both exciting and daunting. Here are a few tips to help you manage your new card wisely.
Know your card
Really understand the card that you have, not just what kinds of rewards it offers. Understand the terms of the credit card, the limit, interest rates, fees, and payment dates.
Keep away from the limit
Try and keep your balances low and around 25% below your credit card limit at any given time.
Pay on time
Know when your payments are due and aim to send your payment with enough of an advance that it will be received before the due date. This will help you to avoid any late fees.
Pay it all
In addition to paying on time, it’s important to pay your balance in full every month so that you avoid accruing interest charges. If you really can’t pay the full balance, at least make the minimum payment and try to pay more than the minimum if possible. Don’t charge more than you’ll be able to repay.
Scrutinise your statement
When you receive your credit card statement go through it carefully. Look at every transaction, your last payment and any other credits, to ensure that everything is as it should be. Don’t take it for granted that everything on that statement is correct, you need to be on the hunt for anything amiss.
Skip the small stuff
It can be tempting, especially if you’re new to the credit card world, to use your card for any expense that comes your way. Don’t. Avoid swiping your credit card for day-to-day purchases; be selective about how you use your card.
Be responsible with increases
Your credit card issuer will periodically increase your card limit, don’t take it as an invitation to spend more than you need to or can afford to pay off.
Know your rewards
If you’ve signed up for a rewards card you need to maximise the benefits. Sign up for any rewards programmes you’re eligible for, monitor the rewards you’ve accumulated and make sure to use them before they expire. Some cards come with extra perks like travel insurance. Know what your card offers and take advantage of it.