Getting your first credit card can be a major step, but it’s just the beginning of establishing your credit history. Once you figure out the risks and rewards of credit, doors can really start to open as you achieve other milestones, like obtaining a mortgage. Even if you know what you’re doing, it can sometimes takes a little while to get it right. Consider these tips for how to get the most out of your credit card.

Discover it® Chrome Student Card

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Find the Right Card for You

There are lots of options out there, so you’ll want to consider your specific needs when you’re researching credit cards. For instance, if you are a student and plan to study abroad, watch out for cards with foreign transaction fees, which typically range from 1 to 3 percent of the purchase amount. Or if you made the dean’s list this semester, check out the Discover It® Student Cash Back card, which issues a $20 statement credit each school year your GPA is 3.0 or higher for up to the next 5 years.*

If you’re not a student, and don’t feel financially prepared for a traditional credit card, consider signing up for a secured card, like the Discover It® Secured card, meant for individuals with limited or no credit history. Secured cards typically require an initial deposit, which becomes the line of credit. In other words, if you put down $500 to open the account, your starting credit limit is $500. Putting down the deposit up front secures the line of credit to the lender, in the event that you don’t pay your balance. Once you use your secured card responsibly for a set period of time determined by your issuer, you may transition to an unsecured line of credit and receive your security deposit back. Secured cards can help you build a credit history, and can be a good entry into responsibly managing credit.

Use Your Credit Wisely

“Understanding how much you make versus how much you can pay can keep you from getting into a financial hole that could take years to undo,” says Victor Muñoz, Financial Advisor. “Credit Cards aren’t free money, they are valuable tools that—when used strategically— will improve your financial literacy and could open options for other financing needs.” One of the keys to success is a low credit utilization — meaning you use a small percentage of your available credit. Keeping an eye on your credit utilization can help you keep spending in check, too.

Another good way to use your credit smartly is to avoid looking at your credit card like it’s free money. Think of it as spending funds you already have, and it’ll be easier to resist throwing down fifty bucks on delivery pizza. Of course, starting a budget and sticking to it will help with all of this, so use your new credit card as the incentive you need to get your financial future off to a good start.

Maintain a Balance of Zero

Contrary to popular belief, you don’t need to carry over a credit card balance from month to month in order to build credit. In fact, your payment history (or lack thereof) is one of the biggest factors in determining your credit score, according to Nerdwallet.com. But a more immediate consideration is your card’s APR, or annual percentage rate, also known as interest.

“Make sure you completely understand the fees associated with credit cards,” says Muñoz. “While it might seem easy to swipe now and pay later, remember you are borrowing the money and must pay it back. Carrying a high balance or being unable to make your minimum payment can hurt your credit long into the future.”

Unfortunately, since lending to someone with no credit history is typically seen as risky for card issuers, the annual percentage rate on student credit cards can be higher than average credit card interest rates — generally around 20 percent. In other words, if you charge $300 in textbooks in September but carry over that balance until the end of the semester, you might owe almost double the original amount in accrued interest.

Keep Your Eyes on Your Credit

It may seem early in the game to think about this, but graduating with an established credit report can put you one step ahead of the pack when it comes to renting a place, leasing a car, opening a new account and the various next steps in your life. Every time you move or change your email address, make sure to thoroughly update that account information on any subscription services you have.

If you take these tips under advisement and act accordingly, you’re likely to be well on your way to using your credit card like a boss.

*Good Grade Reward only available to new cardmembers on or after 7/23/2015 who indicate on their application that they are currently enrolled in college, and whose accounts are current and remain open when the Good Grade Reward is requested. Students with a Discover it® or Discover it® Chrome card who have a GPA of 3.0 or higher (or equivalent) during a School Year (September – August) may apply at Discover.com for a $20 Cashback Bonus (“Good Grade Reward”). Starting 9/1/2018, this promotion will be a $20 statement credit to your account and no longer Cashback Bonus. This will be applied to your account within seven (7) business days. One Good Grade Reward per School Year, per account, up to a maximum of five (5) consecutive years from the date your account is opened. Terms of Good Grade Reward Offer are subject to change.

Legal Disclaimer: This site is for educational purposes and is not a substitute for professional advice. The material on this site is not intended to provide legal, investment, or financial advice and does not indicate the availability of any Discover product or service. It does not guarantee that Discover offers or endorses a product or service. For specific advice about your unique circumstances, you may wish to consult a qualified professional.