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First credit card: habits that keep you out of debt

Use the card for what you can pay off, set autopay and watch the date. Ten checks for the first month.

21 items · 5 sections · money, personal-finance, budget

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Before the first swipe (5)

  • Find the interest rate (APR), annual fee and late fee
  • Find your credit limit, then decide your own limit at a third of that
  • Note the statement date and the payment due date in your calendar
  • Set a card alert for every purchase over a small amount
  • Read about how credit cards workOpen

Autopay (4)

  • Set autopay for at least the minimum payment, so you are never late
  • Aim to pay the full statement balance every month, from your bank account
  • Check your bank has enough money the day before the payment
  • If you can't pay in full, pay as much over the minimum as you can

Habits (5)

  • Use it for things you would buy anyway, such as fuel or groceries
  • Keep the balance under 30% of the limit; lower is better for your score
  • Don't take cash advances: they cost extra from day one
  • Don't open many new cards in a short time
  • Don't lend the card or share the number, CVV or OTP with anyone

Every month (4)

  • Read the statement line by line; report any charge you don't know at once
  • Check subscriptions on the card and cancel the ones you don't use
  • Compare spend with your budget
  • Keep receipts for big purchases for returns

After 6 months (3)

  • Check your credit report for errors
  • Ask whether a limit increase is possible; don't spend more because of it
  • Keep the first card open to build a long history if it has no fee

Written from www.consumerfinance.gov

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