A guide to first time credit card users

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 1. How to have a good credit score    

You probably already know that your credit score is one of the most important numbers that can determine your financial future. The FICO credit score, used by many companies when you apply for a loan, determines whether or not you will even be considered for a loan. In order to have a good credit score, you must make sure that your score is above 600.

When it comes to credit scores, there are two types that you should familiarize yourself with. These are the FICO and the VISA. Both are used to determine a credit report score. But the differences between them may surprise you. Here are some things that can affect your credit score and what you can do to improve it.

First you should understand how your FICO is calculated. The formula is relatively easy to understand. It uses your payment history to compare you to everyone else who has used credit in the same period. The credit report then deducts payments from those same people to get your credit score. For example, if someone has made two payments late and has defaulted on a loan then this will be included in their report as a negative mark against them.

If you have made no late payments or defaults on loans then you will have a better rating. This is because you are proving to lenders that you are a good risk. Lenders will look at this and increase your rate. This increases your chances of getting approved for new credit. Having a good credit score is all about paying bills on time. Saving money is key to ensure you are playing all of your bills on time. Looking for ways to lower your bills will make them easier to pay on time. For example; finding a affordable rate can lower your monthly Vectren Energy bill which will make it easier for on-time payments.

To improve your FICO score, you must make sure that you pay your bills on time. Be careful, though, not to fall into the temptation to max out your credit cards. If you are over your limit and find yourself in a dispute with your card company you want to call them first and ask for a cancellation of the account. Do not cancel it yourself and wait until your bill arrives at your house or work. That way you can ask them how much you can expect to get and work out an agreement to avoid a fee.

How to have a good credit score can be difficult but it can also be very simple. You have to take the time to check your credit report and make sure you are not overpaying and finding negative marks against you. It also helps to not fall into bad habits such as maxing out credit cards or defaulting on loans. These bad habits only serve to drive up your debt and lower your credit score. Follow these tips and you should soon find your credit score rising each month.


 2. Picking a credit card    

One of the things you need to do when picking out a credit card for the first time is to determine exactly how much you can afford to spend. As tempting as it might be to go with the lowest balance card that offers free airline miles, it’s often better to go with a mid-range card that has reasonable interest rates and a decent rewards program. Even those cards that have no air miles have a rewards program, and those rewards can often earn you some decent interest points as well. The best thing to do is take your time, check out the options, and make sure you’re getting the best deal. Then, choose your credit card wisely.

The first thing to know about credit cards for the first time buyers is that they come in all shapes and sizes. There are low-interest cash back cards, credit cards with great rewards programs, cards with annual fees and higher spending limits, and so on. It can be difficult to sort through all of these options, but it’s not impossible. In fact, there are online tools that help you compare all the options side by side. This gives you a way to see what’s available and make an informed decision.

You should also understand that every credit card has a fee when you open one. Some of these fees may be waived or reduced once you’ve established a good history with the credit card company. If you’re just starting out, take this into consideration before choosing your first time credit card. Also, make sure the credit card you’re interested in has a rewards program. This can easily save you hundreds of dollars in interest charges over the life of the card.

Before deciding upon the first credit card you want, consider what use you will make of it. If you don’t travel that much or buy a lot of expensive items, then you probably won’t need a lavish credit card limit. On the other hand, if you are a frequent traveler, purchase a lot of high-priced items, or have lots of open accounts, then you may want a more generous credit card limit. Also, keep in mind that once you apply for a credit card, you stay with that company for a specific period. If you decide later you want to switch to another company, you may no longer be able to do so because you’ve already accepted a new card.

Don’t make the mistake of assuming that every credit card offers the same rates. There are differences between cards that could make a difference in your budget. Some cards offer lower annual percentage rates, while others offer higher savings rates. Be sure to read all the information provided with a potential card, as interest rates and fees vary from card to card.

Finally, remember that you need to check out how the credit card issuer will report your payment history to the credit reporting bureaus. Most companies report your payment history to all three, but some don’t. This could have an effect on your ability to get low rates and may even cause problems if you want to purchase items or pay bills online. It’s a good idea to check these details out before choosing your first credit card.



   3. Things to know before you pick a credit card 

The first thing to know is that credit cards vary from one company to the next. When you’re offered a credit card, it could be from a major bank like Bank of America or Chase Manhattan or it could be from a smaller, local credit card issuer, such as American Express or Discover Card. You should also know what the interest rates and other terms of use are before you choose a credit card.

The interest rates on credit cards vary depending on the company offering them. Bank of America’s interest rates are among the highest, but American Express and Discover Card offer competitive rates. Discover Card offers low annual fees and an easy application process with no credit check. American Express has low annual fees, but their interest rates are higher than Bank of America’s. Before you choose a credit card, make sure to read all the information that the credit card provides you, including interest rates, fees, balance transfer policies, and rewards programs.

The first thing to know before you choose a credit card is how much you plan to charge on the card. Do you plan to charge on a monthly basis? Or are you only planning to charge occasionally? What types of purchases do you make with your credit card on a regular basis? Are you someone who purchases a lot of impulse items such as video games and clothing for their kids? If so, you should probably consider a card with a high interest rate, since these type of purchases will add up to large bills that you’ll be responsible for paying off.

Before you choose a credit card, you should also look at any membership fees or added services that the card has available. For example, some cards will offer perks like airline miles and hotel stays for every dollar spent, but you’ll need to know if these bonuses will really help you save money. Also, do you plan to cancel your credit card? If you don’t, you’ll want to find out if there are any fees associated with canceling your account.

You should also take a look at the incentives that the credit card offers you. Will they increase your credit limit if you pay your bill on time each month? Will you get cash back bonuses if you purchase certain items? These types of credit card deals are intended to earn you more interest in the long run. However, you should still be sure to read all the terms and conditions to make sure that you’ll be able to keep your balance paid and not rack up debt again. Some credit cards will earn you points if you pay off your balance every month, which can actually reduce your overall debt instead of increasing it.

One of the most important things to know before you pick a credit card is to make sure that you’re getting one from a reputable company. Many companies will promise you everything, including low interest rates and zero percent introductory balances. Unfortunately, these claims often turn out to be false. Before you sign up for anything, check the credit card company’s reputation. You can check with the Better Business Bureau. The number after the name of the company will usually be a yellow mark against their reputation.

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