What do you wish you could have told yourself when you first got a credit card?

Question

Sometimes, the only way to learn is by trial and error. Unfortunately for financial security, reversing mistakes is often a costly and timely process. What is some advice you would offer people that are obtaining a credit card for the first time?

Answer 1

I'd say props for getting a credit card and beginning to establish your credit. However, I would also say to make sure you pay off the full amount each month and never have more than $500 as the total balance. Act like it's a debit card - only spend what you have.

Credit checks are common for so many things (renting an apt, buying a car, buying a house...) and can affect the rate you pay so it's good to establish a good history.

Answer 2

Many people are against using credit cards entirely, however you can use them responsibly and to your own benefit if you know what you are doing.

When I started out I use to use my debit card for everything. Somewhere along the line though I realized that using a debit card doesn't come with any benefits. You can use a credit card in the same manner as a debit card if you do so carefully. For example if you track your checking account balance and record all credits and debits you will always know what you have in that account.

What I do is use my credit cards for anything and everything and then track them as I would if it were my debit card. I never spend more than what is in my checking account and then always know that I have the ability to pay the card or cards off in full each month. Because I do this, all of my credit cards are set up directly to my checking account and they automatically pay themselves off before the due date each month. This allows me the benefits of a credit card (protection, points, cash back, etc) without the added cost of maintaining a balance.

I use an app on my phone where I entered the beginning balances of all of my accounts. Mine includes only checking and savings accounts. Then when I use one of my credit cards I enter that debited amount into the checking account that card is hooked to. This shows me at all times what I will have in my checking account if all of my credit card bills were paid in full at any given time. As I said above they all pay themselves off each month so I never have a balance and then never pay interest. At the same time I am able to build my credit, build up cash back offered by the credit card companies and all of the other benefits that come with them. I definitely wouldn't ever tell anyone that they need credit cards but like I said if you use them in a smart way they can literally make you money!

Answer 3

1) Every time I carry a balance on any card, put that card in a file. No charging on cards that already have a balance.

2) No card comes out of that file until they are ALL paid off. You remain in financial trouble until none of your cards has a balance.

3) Once the cards are all paid off, take that exact same amount of money and send it to a credit union savings account. This becomes the emergency fund.

Answer 4

Get a credit card with a low limit. Only purchase items you can afford anyway and pay it off in full every month. If you really need the new item get a bank loan at a better rate.

Answer 5

Absolutely nothing. We (wife & I) applied for, and received a credit card not to exceed $10,000. We have an auto pay and the card is paid off regularly. The only reason we put $10,000 was for emergencies. We have never exceeded $5,000 (2 times). Discipline.

Answer 6

You it to make you richer not poorer. If only I knew than what I know now, if younger me could take those credit cards and you them to build instead of to buy than I would not have end up in this mess. If I could just hand myself all the financial information I hold now. He would not be my younger self, he would be my current self. I can't my younger self what I know but I can give You what I know. Download my free report at www.limitlessfe.com to gain the information I can't give my younger self.

Answer 7

Cut it up. It can be bad as an open account on the credit bureau report...lowering your score.
If you keep it, don't use it. If you use it, pay the balance before the end of the statement period.
NEVER max it out.
Most important, look at the APR and don't buy anything that you will use up like gasoline or food. Otherwise, you're paying interest on something you don't have.

Answer 8

This card is a potential bomb. If used correctly and sensibly, it can be an angel. If used carelessly and without careful consideration, this card can be one very huge problem that will take years to fix. So, do not be cavalier about using it.

Answer 9

This question is a violation of the community guidelines as a chat violation. I wish I would have told myself that rules are only for the people who aren't allowed to break them.

Answer 10

Teaser rates are dangerous. A year (or other "long" period of time) may seem far away, but time flies. You can then be stuck with high rates because you weren't able to pay off the balance transfer (or cash advance) in time.