Those who have experience will not think too much about a credit card and what it has to offer simply because they are used to having one. However, when it comes to first-timers, the situation is a bit different.
Getting a credit card can be quite a big achievement. For some, it is a milestone to prove that they have reached adulthood, for others, it shows that their financial situation is in good shape.
If you are about to get your very own credit card for the first time, there are certain things you need to know. Otherwise, your inexperience could lead to a financial disaster.
Credit Card Interest
You might be thinking that credit card interest is pretty straightforward and easy to figure out, right? Fees accumulate based on how much you spend each month, and that is all.
Well, the reality is quite different and there are much more involved in this. Different cards have different fees, and you need to make sure to keep track of these things in case the credit card company decides to take more for themselves than they should. Give this great guide on how credit card interest works a read so you do not miss something crucial when the time for paying your bills comes.
Beginners Will Not Have Access to the Best
The best credit cards will not be available to the beginners simply because they have no prior credit history. Companies are smart enough not to trust random people with this even if a person does seem reliable.
So you will have to start pretty much from the bottom and move your way there until you have enough credit to get something that comes with various perks and rewards.
There is absolutely no reason to be bummed out about it. Virtually everybody starts in the same manner, and since this is your first credit card regardless, fretting too much about it will not get you anywhere.
Security Deposit
You can always improve your situation beforehand, especially if you are looking to get a business card or something more complex.
A cash deposit is a great indication that you are serious about it and do not have a lot of problems with your finances. The minimum deposits range from 100 to 500 dollars. As you can expect, it depends on where you are applying for the card.
It is also worth mentioning that you can always make a bigger deposit and increase your credit score that way. But since this is your first credit card, putting too much in the account is not necessary.
Be Careful
Things will get exciting, but do not take things too far by spending money on things you do not necessarily need. Being smart and reasonable will improve your credit card and help with financial endeavors in the future. At the same time, your credit score can go downhill to a point where you get denied pretty much everything.
Research Before Applying
You should spend some time researching the available options. After all, you want the best possible credit card, correct? Ask your friend and family about their experience and what things they would advise you to do.
Most people pay attention to fees and such without actually bothering with other perks, even though they really should.
Some Fees Are Avoidable
Things can become easier if you are smart about it and pick the right option. For instance, you can find plenty of starter cards that will not charge you annual fees. Late fees will also not exist if you are on time with your payments.
There are some foreign transaction fees but those apply only when you are transferring money outside the country, and even then, you can get a credit card that disregards this fee completely.
Never Be Late with Your Payments
The number-one rule when it comes to taking care of your credit card has to be paying bills on time. Missing a payment once or twice will not be that big of a deal, but if you get in the habit of being late, you will have to deal with various fees, penalties, and, ultimately, your credit score going down the drain.
Credit Card Fraud
If you are worried about credit card fraud, put these thoughts away. Credit cards have a massive advantage over debit cards because when someone gets hold of your credit card, they will not be able to simply spend their money like it is nothing.
Denied? Find Out Why
If your credit card application gets denied, do not panic and simply speak to the person who works in the company. They are obliged to tell you why your application is denied. Talk things through and get to the root of the problem. Once you know what needs to be done, you can fix that and re-apply for a credit card again.