Tips to successfully manage your first credit card
Anthony DaCosta, Senior Vice President and Director of Sales, Univest Bank and Trust Co.
Are you thinking about getting your first credit card? As students start planning to head off to college, this is often a consideration. Here are a few tips to follow to make your first credit experience a step toward a strong financial future.
Choose your first card wisely.All credit cards are not created equal. It's important to know your card's two key terms: APR and fees. APR stands for annual percentage rate, and it tells you how much interest you'll be charged for the balance you carry from month-to-month. The lower the APR, the less you'll pay in interest on your card. Some cards have fees such as annual fees, late fees and cash advance fees. Look for a card that has no annual fee, or a low annual fee, and pay attention to other fees before using your card.
Once you have chosen your card, it's time to start using it the right way.
Pay your bill on time every month.Not only do many cards charge a late fee if you miss a payment deadline, but it will also damage your credit history. Create a reminder in your calendar to help you remember to pay on time.
Pay more than the minimum balance. While it may be tempting to pay only the minimum balance on your card, doing so will extend the time it takes to pay off any balance. That means you'll be paying more in interest than if you made a larger payment sooner. The best thing to do is pay off your credit card each month to avoid credit card debt, which can impact your ability to apply for loans for major purchases in the future.
Limit your monthly spending.Spending to your card's limit can be dangerous and may hurt your credit history. A good rule is to keep your monthly spending at less than 30 percent of the card's limit to show creditors that you can use credit responsibly. It is also important to remember your budget when using a credit card. If you don’t have the funds in an account to pay for a purchase, you should think twice before swiping.
Are you ready for the financial responsibility of a credit card? The Univest Visa® Platinum Credit Card is a great way to get you started on the path to a strong credit history. No credit score is necessary to get the card, simply provide a current pay stub. For more information call 877.723.5571.
Univest Bank and Trust Co. is Member FDIC and an Equal Opportunity Lender.
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