New Credit Card Holders

Are you glad because you finally got your first credit card? Were you eager to use it right away at your favorite shopping mall? Pause for a while and read these tips for the new credit card holders like you.

Sign the back of your credit card before activating it

Once your credit card has arrived in the mail, promptly sign the signature box on the back of the card. This will show that no one can ever use your credit card but you. Then after this, call the phone number that is often stuck to the front of your credit card to activate it. Remember that your signature at the back of your card will be the main security of your credit card. If you misplace your credit card without signing it, then someone can use it and forge your signature, so be careful.

Read the credit card agreement

When it is said in a user agreement, it is usually synonymous to rules and regulations. The credit card agreement includes the terms, conditions, features, charges and penalties of the credit card. Be aware of credit card pitfalls by knowing the rules and understanding terms like annual percentage rate, finance charges, annual fees and other terminology written in the agreement. Here’s a hint about the annual percentage rate: It is an annual interest rate charged on the amount you borrowed on your credit card.

Use your credit card properly

Your credit card has assigned credit limit. Meaning you are only allowed to maximize your expenditure on the assigned credit limit only. Don’t spend too much. Exceeding on the credit limit given to you will result in you having over-limit fees or charges. The credit card issuer might issue a higher interest rate if you opt in over your credit limit. Develop a self-disciplined character on yourself. Learn how to control yourself in spending . Avoid over-spending.

Monitor your purchases

Make a list. Itemize all your wants and needs before going to the shopping malls or grocery stores. If this is not your habit, then make it a habit. It will not only make you a smart buyer, but also a smart credit card holder. Also learn to keep all the receipts of your purchases. Compare them to your credit card bill when it arrives. This will help you monitor the correct balance of your credit card bill. Because there might be instances to have erroneous or questionable transactions indicated on your bill.

Pay your balance in full as much as possible

If you don’t want to pay any interest or as they call it, a finance charge, pay the full amount of your credit card balance; every cent counts. But if it is not possible, then always pay more than the minimum amount balance of your credit card bill. This will prevent debt build-up. Though the remaining balance will be having a finance charge on the next billing, at least it lessens. Don’t bear to your mind that you can at least pay on the minimum amount balance every month. This minimum amount balance might result you to pay more than what you expect to pay for. You might be wondering why your balance doesn’t turn into zero over the long run. This is because you were just paying the minimum amount every month. There is a finance charge when you do not pay full amount of your credit card balance.

Don’t pay late

Paying late with your credit card bill is a big no for the old credit card holders. Late payment may cause into late charges or penalty fees on your next credit card bill. It is better to pay before your billing due date. Paying the bill three days before the due date is better if you really don’t want to pay charges for late payment. But if you are having a problem with the due date and you don’t have time to go out and pay for it, there is another way. You can ask your credit card issuer if there is another payment option beside the traditional over-the-counter payment. Auto-debit arrangement and online payment are two options for paying the bill.

These are tips for new credit card holders. It is true that having the first credit card that you ever wanted is exciting. You have the feeling of excitement to use it as soon as it has arrived. Ask yourself first, do you really know how to use the credit card properly? Are you ready to have it? Learn everything about credit cards and understand how it works. Basic knowledge about credit cards may help you be a responsible credit card holder. Do not follow those credit card holders who have mismanaged their finances. Think before you spend. Use your credit card with caution.