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Credit Card Tips for Starters

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Unlike other things in life, getting your first credit card shouldn’t depend on trial and error. Even if you’re just starting out, you have to know exactly what you’re getting into, because not only credit cards can be a costly business, but they can cause significant damage on your credit score. 

Be aware of the different types of credit cards. Before starting out on your first type of credit, it pays to know that credit cards have different terms and conditions, and that what works well for another user might not work the same for you. Student credit cards are meant for college students who are beginners, rewards credit cards are meant for those who have more experience in the line of credit, while secured credit cards are intended for those who have no credit or have bad credit and can’t quality for ordinary credit cards. Knowing all the different types can help you choose the right card that you need.

Use your card while keeping its features in mind. Basically, how you choose and use your credit card should be influenced by its features, including the interest rates, annual fee, and credit limit. Always read the disclosure and compare each card with every other card of its kind in the market. Generally, the best cards are those with no annual fees and low interest rates, but can be hard to get if you’re a beginner.

Expect for your statement every month. The billing cycle is the number of days between your credit card statements and typically last between 21 and 29 days. Your credit card issuer will send you a statement every month detailing your transactions for the most recent billing cycle. You are required to make a minimum payment if you have an outstanding balance, while you might not get a billing cycle if you haven’t used your card for the past several months.

Know the fees. Most credit cards have fees because this is how credit card companies make money, but you can avoid some or all of these fees by adjusting your spending habits. For example, you can avoid finance charges by paying off your balance in full every month, and avoid late fees by making payments on time. You may not be able to avoid an annual fee though if your card has it, but once you’ve maintained the habit of paying off your balances in full, you can next look for a credit card with no annual fees, even if it means it can have higher interest rates.

It can be hard to get your very first credit card. You should keep in mind that credit card companies can be hesitant to issue credit cards to first-timers, for good reason. If you’re just starting out, it pays to know where to head at. In the beginning, you might as well apply for department store or gas cards, which are the easiest to qualify for. If it doesn’t work, consider getting a secured card instead, wherein you’ll have to make a deposit. Don’t worry though, as you can typically convert it to a traditional card within 12 months as you prove that you are financially responsible.

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