The Update

College Credit: The Dos and Don'ts of Your First Credit Card

Opening your first credit card is a significant milestone in early adulthood. It provides an opportunity to build credit, learn financial responsibility, and lay the groundwork for your financial future. However, navigating the world of credit requires careful attention and smart decision-making. By following these dos and don’ts, you can make the most of your first credit card while avoiding common pitfalls.

Do: Build Healthy Credit Habits

One of the most important aspects of responsible credit card use is paying your bill on time every month. Timely payments contribute significantly to your credit score, which impacts your ability to secure loans, rent apartments, or even land certain jobs. Additionally, checking your credit score monthly helps you track your progress and identify any potential issues early on.

Regularly reviewing your statements for suspicious activity is another essential habit. Fraudulent charges can happen to anyone, and catching them early minimizes potential damage to your finances. If your credit card issuer offers to increase your credit line, consider accepting it—but only if you can resist the temptation to overspend. A higher credit limit can improve your credit utilization ratio, a key factor in maintaining a healthy credit score.

Don’t: Fall Into Common Credit Traps

Paying only the minimum balance each month is a costly mistake. Interest charges can quickly add up, making it harder to pay off your balance and potentially leading to debt. Aim to pay your balance in full to avoid interest and maintain financial freedom.

Using all of your available credit line is another red flag. High credit utilization negatively impacts your credit score and may signal to lenders that you rely too heavily on credit. Instead, keep your usage below 30% of your limit to maintain a strong score.

Finally, never share your card information with others. Even if someone seems trustworthy, sharing your card increases the risk of unauthorized charges and financial loss.

Welcome to the Credit World!

Approach your first credit card with caution and responsibility. By following these dos and don’ts, you can enjoy the benefits of credit while avoiding financial pitfalls. Remember, responsible credit use today sets the stage for a bright financial future.

Credit Cards from Rio Grande Credit Union

Thinking about applying for a credit card? A Rio Grande Credit Union Credit Card offers competitive rates and some of the best rewards in the region! Not sure if it's the right time? Our Certified Financial Coaches are here to help. Schedule an appointment to learn more about credit and make informed financial decisions!