Credit cards always come in handy whenever you want to make purchases, but you haven’t received your payment yet. These cards are rectangular in shape, made of plastic or metal, and given by financial organizations to allow you to make purchases on credit. A credit card purchase causes a deduction in the borrowing limit. In contrast, a debit card purchase generates a subsequent deduction in the bank account balance.
The amount credited depends on the limit allocated to the account based on credit history and score for performance. High scores and good history attract a high limit. To use a credit card, you swipe for payment or make a payment online, maybe when you buy bitcoin. To maintain a good credit history and score, you should make timely payments to avoid extra charges on penalties. For first-time credit card owners, here are some pointers for you to consider.
1. Build your credit and make deposits
You will not start off quite well for a first-timer because you have to prove your trustworthiness in making payments in time. A starter is allowed a secured card to make a deposit (security deposit) to be informed of your credit limit. This type of card is commonly owned by people with little or no credit history. The other card is a regular or unsecured card owned by those with a substantial credit record. Your deposited amount dictates the limit you are allowed. Once you learn the habit of borrowing and paying up, your credit record will allow you a more considerable amount as your limit.
Did you know?
You can buy bitcoin with credit card. Once you raise your credit history, you can buy cryptocurrencies on credit and transact anonymously.
2. Preserve your first credit card
Credit cards always come through when we are out of cash and need to make urgent purchases and essential daily expenses. Ideally, your first credit card should boost your credit limit because as it ages, your credit score rises on more deposits each day. Therefore, canceling this card should be the last thing on your mind unless you have significant issues with your account. When you cancel it, your credit score can suffer a flop because the limit will consequently fall. As you get your first credit card, use it responsibly as it will solidify your credit history. You can enjoy a comfortable limit to purchase more, say, buy cryptocurrencies in years to come.
3. Research your options before you apply
There are several credit card issuers in the game; therefore, they are required to clearly stipulate their interest rates and chargeable fees on membership. This information is found on each of their websites, so you can easily research the issuers you had an eye on before deciding which to choose. Their offers, terms, and conditions can give you intel on the advantages and disadvantages of each credit issuer. Once you make an application, it is taken as a hard inquiry. Your credit score becomes subject to scrutiny; therefore, it can be lowered. Be careful with your applications, and make sure you just apply for the one you desire.
If you are a student, college student cards are your take. There are numerous offers including and not limited to rewards for good performance of up to $20.
4. Pay up on time to dodge accruing interests
When your billing cycle ends, you should make your payment before the due date to avoid attracting any interest. A grace period is always given on 21 days or more, depending on the issuer. If your billing cycle comes to an end every 31st of the month, and your grace period is 21 days, you will have to make the payment before the 21st of the next month or accrue interest.
If you don’t ever want to miss a billing payment, you can use the autopay option to always make sure your payment is completed on time.
5. Use just some amount of your credit limit
Your credit score is also determined by how you use your limit. For your credit utilization rate, you are advised to use up to 30% of your limit. This ratio determines how much you use compared to what is in your dispensation. A new credit card user may not see the need to maintain this ratio. Still, soon as you have a high credit limit from having many cards, the need arises.
Credit cards can help you make incredible purchases, like cryptocurrencies such as bitcoin. To buy bitcoin with credit card you must have a considerable limit to enable your purchase, so grow your credit score.