Guidelines for Using Your Credit Card

If you are getting your first credit card, then it might be helpful to review these guidelines for using the card wisely. Even seasoned credit card users might find a new tip or two below.

1. A credit card is serious business. The issuing company is lending you money and you have the responsibility to pay it back.
2. One card is probably enough. Avoid temptation by limiting yourself to one card.
3. Keep the credit limit low. Depending on how you are going to use it, $500 or $1,000 is high enough for most first-time credit card users. This will prevent you from spending more than you can pay back.
4. Pay off the entire balance each month. Avoid charges and build a good credit record.
5. Make the payments on time. This helps build a good record and avoids late payment charges.
6. Never let others use your card. You are responsible for all charges on your card. Do not let others borrow it or give out the number.
7. Keep track of your use of the card and compare your records against what shows up on the monthly statement.
8. Keep the card active. Even if you are only using the card for emergencies, use it for small purchases every three or four months just to keep it active. Then be sure to pay off the balance before any interest is due.
9. Avoid using the card for cash advances. The interest rate charged for advances is usually high and interest is charged immediately.
10. Create a spending and budget plan. Do not let your credit card payments exceed 20 percent of your monthly income.
11. If having a credit card turns out to be a problem, then get rid of it or stop using it for a while.