There are a lot of things that you can do to keep your credit score and your finances afloat when you have credit cards, but there are a large number of people who have next to no understanding of how they spend money affects their credit over the long run. There are a lot of questions that those just out of high school and getting their first credit card may have and we have some answers for them.
One of the first things that anyone getting their first credit card needs to understand is that it is not a toy. It may seem as though I'm talking down to them when I say this, but saying "I understand" is not as difficult as resisting the urge to use the card for things you do not need. You may be able to resist using the card for a large purchase of hundreds of dollars, but you might not be able to resist getting a latte at the coffee shop every day. It's only four dollars, right? That four dollars every other day certainly adds up to a lot more than you think it does at the end of the month. Do the math. What you spend in lattes would probably cover your water bill or cell phone bill every month if you have a habit of getting them.
Never, ever miss a credit card payment. It doesn't matter if you only have enough money to make the minimum payment, make it, anyway. It is best to make the maximum payment you can afford at the time and even better to pay it off every month, but not many people accomplish this. As long as you keep your balance down to under 30 to 40 percent of your credit limit, you should be fine.
Avoid the temptation to use the cash advance feature your card may come with. If you have a debit card, get the money out of your checking or savings account instead. The cash advance feature of your card, if it has one, is likely to have a higher interest rate on it and you do not want to deal with this. This should be reserved for emergencies only.
Last, but not least, avoid letting your card fall into the wrong hands at all costs. Even though many companies will cover the cost of a stolen credit card, a lot of headache is involved in making things right again. If you don't use your credit card for everyday purchases (and you shouldn't, unless you are a very financially responsible person), leave it at home in a safe place.
