It’s a momentous occasion for anyone’s personal banking journey to get their first credit card. Building a good credit score is essential for renting or buying homes, vehicles, and other significant purchases with minimal monthly payments and interest rates. To enjoy the benefits of good credit, it helps to get off to a good start, so consider some tips. 

5 Ways to Optimize Use of Your First Credit Card 

1. Stick to a Budget 

Avoid using your credit card to buy things you couldn’t immediately afford. In fact, budget so that 50% of the money you put on your card is spent on necessities, 30% on items you want, and 20% on debt or savings.

Keep track of each purchase and refrain from spending more once you’ve reached your predetermined limit. Strive to keep it at a third of your total credit limit or below. 

2. Set Up a Pay Schedule 

Making regular payments on your credit card shows that you’re trustworthy and reliable with your personal banking, so you would likely be the same with other areas of your life.

It also keeps you from incurring late fees. Make at least the minimum payment on your card on or before its due date each month. If you’re worried about forgetting, sign up for automatic payments through your online banking account.  

3. Pay It Off Monthly 

Whenever possible, avoid putting so much money on your credit card that you’re unable to pay off the full amount every month. By regularly clearing out the full balance, you further suggest that you’re dependable and responsible. It also prevents you from dealing with accumulated interest. 

4. Take Advantage of Perks 

Many credit cards come with rewards. For example, if you use it often enough or for certain kinds of purchases, you can earn points that give you cash back. They may also provide insurance for travel or rental cars, extended warranties, waived baggage fees, refunds on items that are reduced in price after purchase, and more. 

5. Review Statements and Reports 

Every month, look over your credit and personal banking statements and reports to ensure that there’s no activity you don’t recognize. If you see anything suspicious, contact customer service and report the possibility of identity theft. You’re more likely to prevent this problem by never sharing your account information with anyone, and take advantage of credit monitoring services. 

 
For help selecting and using your first credit card and other personal banking services, go to Magnolia Bank in Elizabethtown, Hodgenville, and Magnolia, KY. With years of experience providing personalized and attentive banking services to the community, they’re happy to help with all your financial needs, including opening checking accounts, getting SBA or mortgage loans, and more. They also make sure that they keep up with technological innovations in banking so that your information is always secure and well-organized. For details about their products, call them today at (270) 358-3183 or check out their website.