Your New Credit Card

Why did you apply for that credit card? Was it to purchase an airline ticket online? Was it to help establish good credit for your future? Or was it because you find yourself low on cash each month?

Let’s hope it was not for the low on cash reason. That should be a big, red flag for absolutely not getting a credit card. If you cannot live within your budget, a credit card is not the answer. But, we do need credit cards for most of our online purchases. And, more importantly, to establish a good credit score for future purchases, like a home or car. When you apply for a credit card, you know it will be a helpful tool, but one that you need to be very careful with. Sort of like buying a chain saw. Sure, it’ll help you cut down that tree, but there are obvious risks. This is how you need to treat your credit card. Use it only when necessary... and when you do use it, proceed with caution.

So, what if you are new to using credit cards? You’re not so sure when and when not to use the card. Or maybe you just want some parameters to keep yourself in check until you feel more confident. If that’s the case, then here are some tips for making smart decisions with your new card:

• First and foremost, you need a budget. You need to know that you can pay off any balances at the end of each month.
• Excellent point – pay off your balance every month. You’d be amazed at how quickly carrying a balance can add up and get you in trouble.
• Only use the card when absolutely necessary.
• Be sure to shop around for the best rate.
• Review your statement every month. This will help you see how your money is being spent and also ensure that your card has not been used by anyone else.
• Keep your card in a safe place. And, if you do lose your card or you suspect it has been stolen, alert your financial institution immediately.

If you spend within your budget, use your credit card only when necessary and use some common sense, you’ll be on your way to establishing good credit for your future.