What Should I Know Before I Get My First Credit Card?

I first discussed this when this blog first started, but guess what? I still haven't gotten a credit card! I have never had one, so it's kind of hard to be approved for one.[no_toc]

There are many reasons for why I want to get a credit card. The main reason is so that I can start working on building my credit with an actual credit card.

This can then help me buy things such as a house or get approved for an apartment. I want to start now so that I don't have to worry about not being able to get something later on just because I don't have sufficient credit history.

If you think your credit limit is too high, ask the credit card company to lower it.

With your first credit card, usually, your credit limit won't be too crazy high. However, there is the chance that your credit card may have a higher limit than what you are comfortable with. If you think that you may just spend more because you have a higher limit, then you may want to call your credit card company and ask them to lower your credit limit.

However, if you ask them to lower your credit card limit, keep in mind that this will affect your utilization rate as well. However, the consequences of overspending far outweigh the utilization rate factor to me.

Watch your utilization rate.

If your limit is $1,000 and you spend $900, this will affect your credit score. You want to keep your utilization rate at around 30% or lower.

Don't carry a balance.

If you carry a balance, then you have the potential to pay interest if you carry it over whatever your credit card company's time frame is. This will affect your credit score and you may have to pay interest as well, and that can add up very quickly.

Hide your credit card if you get out of hand.

If you cannot to save your life control your credit card spending, then you may need to get rid of it completely or hide it from yourself.

You can also try just putting a small amount on your credit card each month to keep it active (maybe one grocery purchase each month), and then hide it from yourself if you find that you spend more when you have access to a credit card.

What credit card tips do you have for newbies like me?

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