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First Time Credit Card Users Guide

credit cards
For the average person, the thought of getting their first credit card can be quite exciting. There is something that you need to make sure that you are aware of before you go all in on spending your credit limit in a hurry. It can seem like you have free money, but the truth of the matter is that a credit card are not free money and you as a first-time user need to understand everything that surrounds this subject. The first area is that you need to understand what exactly is a credit card. This may seem like a debit card but it actually is not like that. This is a card that you borrow the money that you need for a purchase. You will have around thirty days before a payment will be due. if you make the full payment then you can avoid the interest that will be due upon your payment. If you are only able to make a partial payment, then you will have to pay the interest with your next payment. This interest can accrue fast if you are not careful and go out of your way to make the full payment.

Having a credit card are actually a good thing as these can go a long way in helping to build your credit. That comes with a disadvantage as these can also wreck your credit if you are not careful. In addition to these helping to build your credit, there is the advantage of being able to get rewards such as cash back on your purchases. The more that you spend, then the bigger than the cash back reward will be for you. There are a ton of cards out there that offer a lot of rewards, you will just need to look at the rewards that are associated with the particular card you are looking to get approved for.

There are two types of credit cards out there, secured and no secured credit cards. The way a secured card works is simple, you make a deposit. This will many times be equal to the amount of credit that you have available to you. This is a different type of card as opposed to a prepaid card. With a prepaid card, your balance will run down unless you add more money to the account. With a secured card, you will use this card as you would any other type of card. You make payments and over time your credit limit will be raised.
Unsecured cards work based on your income level along with your credit history. The better these two factors are, then the better of a credit limit that you will have available to you. This will again improve over time as you make more and more payments on time. This is one of the most sought out types of cards around and one of the most commonly issued types of cards.

a credit card can have a big impact on your credit history and in order to understand exactly how this works, you will need to understand the factors that are affected by a credit card. Payment history is one of the biggest factors that can affect your credit. The better that you are in making your payments, then the higher that your credit score will be. If you are always missing payments or are late on your payments, then 35% of your credit score will reflect this. Other factors that go into your credit score are the length of credit history, credit utilization, types of accounts that you have in use as well as new credit. The new credit factor only accounts for about 10 percent.

When you apply for a credit card or you get a new one, it is important that you look at the fees that will be associated with the card you are looking to get. There are a lot more of these fees than you might expect and know what you are dealing with from the beginning will be a great way to make sure that you don’t run into any unexpected fees. Things like an annual APR, balance transfer fee and late payment fees will be things that you need to be aware of when applying for a card.

As you are able to see there is a lot more to the world of credit cards than you ever thought there was. Taking the time to fully understand all the aspects that surround these cards. The better prepared that you are in dealing with this subject, then the better results that you will have and the less likely that you will be surprised by something unexpected happening. If you are looking to build up your credit, then the use of a card will be an amazing way to get a big boost to your credit score and be able to afford the things that you need in life like a home or a new car.