The best credit card lessons for beginners will be the subject matter and a point of discussion in this article. Having a credit card as a beginner can be exciting, with all the possibilities of getting sign bonuses, cashback points, and a bunch of other benefits. But the truth is that as a credit card beginner, that’s also the most dangerous time for you because there are plenty of ways to easily slip up and make some common mistakes with dire consequences. These consequences include getting into high-interest credit cards yo, your credit score, and other general financial struggles that many people could have avoided.
In this article, we will discuss the five best credit card lessons for beginners. These five key lessons can help anyone improve their credit card usage without getting into debt or other problems.
1.0 Have an Emergency Fund
Having an emergency fund when using credit cards is one of the best credit card lessons for beginners. We expect to spend monthly money on expenses like rent, groceries, gas, and other things. However, many unexpected expenses in life are guaranteed to pop up that we overlook in our budgets. These could be car repairs, medical emergencies, or sudden travel needs. Because of those unexpected expenses, building up an emergency fund of six months’ estimated expenses in a savings account is essential. That way, you will be prepared if a random expense pops up; you can pay with your credit card to get points, but then you pay off that balance immediately because you have the flexibility to pay.
An emergency fund is not just a financial cushion, it’s a peace of mind. It is the best solution in the light of the unpredictable, and the best defense against unpredictability is having some sort of a cash safety net to fall back on. Therefore, plan safe and prepare for the worst because you do not want to ever have to turn to high-interest credit card debt financing as your only option to pay for unexpected expenses.
2.0 Treat Your Credit Card like a Debit Card.
The best credit card lessons for beginners have more to do with a mindset shift for people, and that lesson is to treat your credit card like a debit card. When beginners have a new credit card and think they have a new credit limit of $5000, they believe they can use the money in whatever they want, forgetting that the money is a loan.
The best credit card lesson for beginners is to look at their credit card as a substitute for their debit card by ensuring they already have cash set aside in their bank account before they use their credit card for anything. As a beginner, make sure you have some money set aside in a checking account to pay specific bills and pay off credit card balances. I keep several thousand dollars in cash in my bank accounts that I can easily access; it doesn’t matter if I have a $100 trip to the grocery store or if I need to make an $800 tire replacement.
I can use my credit card to pay for those things because I can pay off my Balance whenever possible. Because of that, I get a few benefits by substituting my debit card for my credit card as my preferred payment method. First, I earn points for cash back. Then I can put it towards my travel expenses. That way, I travel almost entirely for free. I also have increased my credits quickly so that now it sit in the high seven hundred because I’ve learned the importance of payment history and credit utilization.
3.0 Pay off your balances in full every month
The best credit card lessons for beginners are to pay off your balances in full every month. I pay off my cards in full each month. As a beginner, try to avoid carrying a balance in the first place. When you pay your statement balance in full, you will not be charged any interest. We want to pay the full statement balance instead of that payment duty.
4.0 Keep Credit Utilization Low
The best credit card lesson for beginners is to keep credit utilization low. This is easily overlooked by beginners because they are not always aware of it. Payment history and credit utilization are the two most important factors affecting your credit score. Credit utilization is a fancy term that basically means how much of your credit card limit you’re using. It’s calculated as a percentage for each credit card and across all cards combined. The calculation for this is simple to understand.
You just take your credit card balance and divide it by your credit card limit to see how much of your available credit you use as a percentage. The calculation is done right around your statement closing date each month when your balance gets reported to the credit bureaus.
For example, if my credit card statement closed on May 15th, my balance on that date was 5, and my credit limit was $1000, my credit utilization would be reported as 50%, which is too high and likely going to hurt my credit score. The general rule of thumb is to keep this percentage below 30% but ideally below 10%; the lower the rate, the better.
5.0 Payment History
The best credit card lesson for beginners is the payment history. As a beginner, never miss a credit card payment because payment history is slightly more important for your credit score than credit utilization. The same payment history makes up about 35% of your FICO, and utilization makes up about 30%. Payment history is important because future lenders look at your credit report and want to ensure you have a strong history of things you owe.
Credit utilization is essential because future lenders want to ensure you are not being too risky and using too much of the credit you have been given. Payment history is more straightforward to understand, but there are still some hidden things to know that can help you stay ahead of your credit cards as a beginner. To positively impact your credits with payment history, remember to pay at least the minimum payment by that payment due date or get to consider on time.
You should pay the entire statement balance by that payment due date to avoid carrying a balance and paying interest. But when you have a perfect 100% record of on-time payments, that’s the best outcome for payment history on that portion of your credit score. If you miss a payment on the due date, then you will start to see negative impacts on your score, and even just a couple of late payments can be a bad thing since those are going to stay on your credit report and, at some point, the credit card issuer is likely going to report that to the credit bureaus if you did not make payment accordingly and especially when you default.
Also, if you want to ensure that missing a credit card payment never happens, your payment history can remain perfect. There are a few things that I like to recommend that people do first. You can set up automatic payments on your credit card accounts, and your statement balance is automatically paid on or before the payment due date each month. Now, there are two small downsides to this, with the number one being that if you don’t have the money linked in your bank account already, the automatic payment is either going to get rejected or you could overdraft on your bank account and have to pay some fees and fees for that.
So, if you set up payments like this, ensure you always have enough cash in your bank account. However, downside number 2 is that automatic payments could lead you to have less oversight over your credit card account, which could cause you to either overspend on your credit cards or miss charges that are supposed to be. That’s why I set reminders on my phone to check my credit card accounts regularly a few times a month. That way, I make sure that I’m on top of everything. Automatic payments can be a good backup plan, but having visibility over your accounts is also very important.
So, just find a system that works for you. That way, you don’t miss any payments, and once again, you can pay off the statement balances on time and be involved each month. I know they keep saying that, but it is something to always remember. Since this video focused on credit cards for beginners, you also want to check out this video over here on common credit card mistakes to avoid the one I mentioned earlier about when to pay credit card bills. But as always, thank you so much for watching. I hope you have a great day, and I’ll see you in the next one.
Also read:
5 The Best Credit Cards You Need in 2025 To Save Money
10 Capital One Credit Card Benefits to Save You Money
11 Ways to Improve Your Credit Scores in 2025 in the United Kingdom
Build Credit Fast Using a Credit Card: 8 Tips for Beginners
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