Is Your First Card Dangerous?
by: Tom Tessin

You’ve finally reached the ripe age of eighteen and you’re now an adult. Some of the first things you may do is buy cigarettes, a lottery ticket, or if you’re a responsible adult, you may go down to your local bank and open up a checking account, so that you can pay off your bills with a check or even make purchases with a debit card.

Like most eighteen year olds, money is very hard to come by. That minimum wage job only banks so much. With school coming up and books to buy, you start to wonder if your student loans are going to cover all of the costs. You already know that Mom and Dad won’t help you anymore. Where do you turn? What can you possibly do?

Like most students, they turn to credit cards. Credit cards can be very helpful if you use them right. When you apply for your first card and get approved, your credit limit will usually be pretty low. It will usually be around the $500 to $1000 mark. Now this can be built pretty quickly, if you play your cards right.

Now let’s say your credit card does have a $500 limit. You are telling yourself that this isn’t much at all. As a student, you have to remember, that this is a lot of money especially if you factor in the high 18-29%+ APR rate. This means that whatever you don’t pay off, you could be paying .29 on every dollar!

When you start using your credit card, you can’t treat it like free money. Don’t just throw your purchase on your card and forget about it. You will need to get into the habit of treating it like cash. Make sure that you can set aside enough cash in the next thirty days to pay off that bill. If not, this is where the troubles start. Once you stop paying attention and go over that credit limit fee, banks usually like to tact on a very heavy fee. This fee is usually thirty dollars or higher. This is why you must closely monitor what goes on your card.

What a lot of people do when it comes to credit cards is forget what they bought. They will receive their bill and realize that they bought things 25 days ago that they completely forgot about. This is where it can stack up and now you’ll have troubles paying it off. This then factors in the APR rate where your credit card bill will put you in that endless hole.

Here are a few things to remember when getting your first credit card –

-- Make sure you pay attention to what you buy. Never go over your credit card limit. This will kill you!

-- Always try your best to pay off your bill in full. This will avoid any interest rate charge.

-- Be Responsible. Don’t treat your card like free cash. Buy things you need and make sure you’ll be able to pay it off!