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When used with care, credit cards can be a beneficial financial tool. You can use them to build credit and learn how to manage your spending responsibly.
Reddit is an excellent resource for new credit card users. You can learn about topics that are new to you as other users share their experiences and knowledge. There are many helpful personal finance resources on Reddit, including useful credit card advice. Before getting your first credit card, ensure you're prepared. You may find the following new credit card user tips to be helpful.
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Pay your entire card balance
Reddit user MissPickleChips suggests new card users never carry a balance. She notes that just because you can carry a balance doesn't mean it's a good idea. You'll be charged credit card interest when you don't pay your entire balance each month, which can get expensive.
Only buy what you can afford
User pleiop recommends treating your credit card like a debit card. Only use your credit card to buy items that you know you can afford. If you spend more than you can afford, you may fall into credit card debt -- which can quickly become a serious financial problem.
Aim for a no annual fee card
Are you researching credit card options? User gdq0 suggests prioritizing applying for a card with no annual fee. If you're new to using credit cards, a card with no annual fee is the best, most affordable way to learn how to use a credit card responsibly.
Consider applying for a secured credit card
Reddit user GastonKobe recommends newbies apply for a secured card. If you're brand new to credit cards and have little to no credit, applying for a secured credit card may be a good idea.
This is an ideal option if you likely won't be approved for an unsecured card with no annual fee. Keep in mind that secured credit cards require you to make a refundable deposit. Once approved and you make a deposit, you can spend up to the amount of your deposit.
You can show you're responsible by making good spending and payment decisions. After some time, your card issuer may decide to upgrade your account to an unsecured credit card. If this isn't an option for the secured card you start with, you can always apply for an unsecured credit card at a later date.
Don't rush to close out your first credit card account
ToxicLogics suggests never closing out your first credit card. It's beneficial to have an older credit card on your credit report because the age of your credit makes up 15% of your FICO credit score.
If you're getting a credit card with no annual fee as your first card, plan to keep that card in your wallet for many years. Doing this will help you boost your credit age.
If you got a card with an annual fee, you can call your card issuer and ask to have that card downgraded to a $0 fee card so that the account stays on your report.
If you're new to using credit cards, that's okay. We all have to start somewhere. The above tips can help you better plan how to use your new credit card to build credit, avoid paying interest, and develop responsible credit card usage habits.
If you're looking for your first credit card, review our list of the best credit cards to help narrow down your options.
Check out The Ascent's best credit cards for 2022
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