Credit Card Tips for First-Time Credit Card Users
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Key points about: managing your first credit card
You can build a good credit history by using your credit card responsibly, including making on-time payments and keeping your balance low.
A cash advance from your credit card can be costly and may be best for emergencies.
Review your monthly credit card statement for purchases you didn’t make and call your issuer if you suspect fraud.
New to credit cards? If you’re a first-time credit card user, you may be excited about the conveniences and opportunities your new card can offer, including a way to build your credit history1. However, you’ll also need to manage the risks, such as spending more than you can afford to pay back.
The key to a thriving card membership is to develop good habits, from making on-time payments to keeping your card secure. Here are some tips that can help:
Learn how to build a good credit history with your credit card
First-time credit card users can use their cards to build a credit history with responsible use. By paying your credit card bill on time each month and keeping your credit card balance low, you can establish a record of good credit management and improve your credit score, which may help you qualify for more credit and better interest rates.
Pay your statement balance on time each month
Paying your monthly credit card bill on time is key to avoiding late payment fees, building a good credit history, and managing your debt. And while you want to pay at least the minimum payment on your credit card statement each month, there are benefits to paying your entire statement balance.
Depending on the terms of your credit card account, many cardmembers start with a minimum 21-day grace period before the issuer imposes interest charges on regular purchases. But you’ll need to pay your credit card statement balance on time and in full every month. If you don’t pay your entire statement balance, you’ll carry debt into the next billing cycle, start accruing interest, and likely lose your grace period.
Your credit card is a fantastic tool that can help make your life easier, but spending more than you can afford to pay back can result in debilitating debt and mounting interest charges. Impulse buying is especially risky when paying with credit. Many credit card companies have a mobile banking app you can use to monitor your spending. You may even be able to set spending limits and alerts to help keep you on track.
Think twice before withdrawing cash from your credit card
A credit card cash advance may help you out of a tight spot, but you should use a cash advance sparingly. Unlike a regular purchase, there’s rarely a grace period for a cash advance, so interest accrues when it posts to your account. In addition, credit card issuers usually apply a transaction fee (often 3% or more of the cash advance amount), and interest is typically higher than the APR (annual percentage rate) on regular purchases.
Learn about your credit card rewards program
Many credit cards offer credit card rewards for each eligible purchase you make. The rewards you can earn vary by card and issuer but may include cash back rewards on every purchase. Redemption options also vary by the card issuer. Make sure you can redeem your rewards in the best way for you and that you understand any limitations tied to your rewards, including whether they expire.
Did you know?
Some rewards credit cards offer rotating category rewards that let you earn a higher percentage of rewards on specific spending categories that change throughout the year. The Discover it® Cash Back credit card lets you earn 5% cash back on everyday purchases at different places each quarter like Amazon.com, grocery stores, restaurants, and gas stations, up to the quarterly maximum when you activate.2 Plus, earn 1% cash back on all other purchases—automatically.
Learn about credit card security
As a first-time credit card user, it’s beneficial to learn how your credit card issuer protects against credit card fraud, including what happens if someone makes an unauthorized purchase with your credit card or credit card information. As a Discover® Cardmember, you’re never held responsible for unauthorized purchases on your Discover Card.3
You may also want to confirm other security protocols, like what to do if your card is lost or stolen. You can check your cardmember agreement for more details, and you might be able to manage your card security using your banking app.
Security tips for first-time credit card users
Now that you have a credit card, finding out how to protect yourself from credit card fraud is essential. Consider these best practices:
- Don’t give your credit card number or any details of your credit card, including the expiration date or security code, out to others. Only provide your credit card information when making a purchase or payment to someone.
- Avoid online purchases using your credit card if you’re on public Wi-Fi, unless you use secure connection services.
- Set up mobile alerts for when a purchase exceeds a certain amount to help monitor for large unauthorized charges.
- Carefully review your monthly credit card statement for purchases (big or small) that you don’t recognize, and contact your card issuer if you suspect credit card fraud.
If you’re new to having a credit card, it’s important to know that establishing good credit habits can help set you up for financial success. Using these credit card tips for first-time credit card users is a great place to start.
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