What You Need To Know Before Getting Your First Credit Card

Credit cards can be potentially deadly, especially for those users who are new to the world of credit and easily hooked in by what would seem like “free” money. There are still many experienced credit card users who still fall under the spell and get stuck. 

If you’re wondering if getting a credit card is right for you — or you’re ready to ditch them altogether — gathering the knowledge to help you prepare and sustain better credit card habits is a must. It is possible to use your credit card responsibly.

You Could Fall Into The Habit Of Overspending

If you’ve already done some research, then you know that most consumers will end up spending more when they pay with a credit card versus paying with cash. A study showed consumers were even willing to pay twice the amount for the item they were buying when using a credit card. It’s easy to feel numb to spending a higher amount when you don’t see the cash leave your wallet.

How to avoid it: Set a personal spending limit and don’t live outside your means. You don’t need to impress people with your credit card. Make sure the limit you set is one you can afford to pay every month. 

Interest Can Make It Harder To Stay On Top Of Your Monthly Payments

If you want to avoid paying interest to begin with, then you’ll want to pay your credit card balance in full each month. If you aren’t paying your balance in full each month, part of each payment will go towards your card’s interest, causing the time it takes to pay off your credit card to increase.

How to avoid it: You’ll want to pay your credit card balance in full. However, if that’s not the case, then make sure you pay what you can until your credit card balance has reached zero.

You Risk Falling Into Debt

You create debt every time you borrow money, whether that’s from another person or using your credit card. The more money you borrow and aren’t able to repay, the more debt you accumulate. Debt can lead to financial stress, health problems, depression and even more serious issues. 

It starts to get harder and harder to reach your financial goals when you get into debt. Other priorities end up going to the wayside while you pay off your debt. 

How to avoid it: Focus on living within your means and notice the signs of credit card debt. If you can’t pay your balance in full each month, stop using your card for a while. 

You Could Hurt Your Credit Score

Your credit card use significantly impacts your credit score. Be mindful when using your credit card. However, if you make a mistake and miss a payment for more than 30 days, your credit score will be impacted. The more mistakes you make, the more impacted your score will be. 

How to avoid it: Basically, you will want to pay your credit card on time to avoid any penalties on your credit score. Keep your balance below 30% and limit the number of credit cards you apply for. 

Minimum Payments Can Trick You Into Feeling Complacent

When you only pay the minimum balance for your credit card each month, essentially, you are paying more in interest and taking way too long to pay off your card. It’s essentially like not making a payment towards your card at all. Credit card companies may only require you to pay a minimum balance to avoid penalizing late fees; however, you will want to pay your card off in full each month if you can.

How to avoid it: Ideally, pay your balance in full. If you’re unable to pay your entire balance when it’s due, then try paying more than the minimum balance of your card so you’ll be able to pay it off sooner rather than later. 

Credit Card Jargon Can Get Complicated

Thanks to the Credit CARD Act of 2009, credit card terms have become a lot easier to understand. However, that’s not to say that if you’re not familiar with them, they aren’t confusing. Most credit cards have various rates, and if you happen to misinterpret yours, you may end up with higher fees or damaged credit. 

How to avoid it: Research your credit card and the different rates and balances it carries. Most credit cards now offer a reward program, so familiarize yourself with it. Learn what you can and contact your credit card’s customer service with any questions you may have. 

It Might Be Harder To Stay On Top Of Your Spending

Ideally, you’ll want to track your spending habits because that makes for a healthy financial foundation. When you take on a credit card, it may become harder to track your overall spending habits. If you’re using cash, debit and multiple credit cards, it can be so easy to overspend each month. 

How to avoid it: Start tracking your finances and expenses either manually — in a journal or on a spreadsheet — or start using software such as Mint to help you keep track of your spending habits.

The Potential For Credit Card Fraud

Anyone who owns a credit card can be at risk of credit card fraud. It’s even possible that someone may steal your actual credit card. However, your liability for these situations can be limited as long as you report any fraudulent activity to your credit card company. 

How to avoid it: Monitor your credit and report any missing credit cards or suspicious charges immediately.


  • Irby, LaToya. “The Dangers of Credit Card Debt and How to Avoid Them.” The Balance, 29 Aug. 2020, www.thebalance.com/dangers-of-credit-cards-960217.
Ian Schindler