Congratulations – you now have your very first credit card. Or maybe you’re thinking about applying for your first credit card.  Before you run out and buy that brand new laptop, you should consider the following:

Consider Your Budget and Income. A classic pitfall even for experienced credit card users is the temptation to spend more than what you can actually afford.  Take a good long look at your budget and how much money you make.  Your new credit card is not a license to overspend on luxuries.  Rather, it is a means to use the conveniences of credit and to begin building a good credit history.

Choose Your Credit Card Wisely. Credit card companies offer a lot of special promos and incentives to entice you into signing up for them.  You need to consider things such as the Annual Percentage Rate (APR), the annual fees, grace periods, finance charges and other charges such as late fees.  The ads love playing up the best features of credit card but you should carefully read the terms and conditions.  That way you know exactly what you’re getting into and the real story behind that attractive promotion.

Pay Off The Balance Each Month. Eventually, you may end up having to make the minimum payments but don’t start bad habits right away.  The longer you take in paying off your credit card debt, the more you actually end up paying in interest rates.  You might think that’s okay if you used your credit card to buy your laptop but what about paying extra dollars in interest just for a Starbucks coffee and dessert?  Pay off the balance in full and save your money for more important things.

Don’t Max Out Your Credit Limit. Most experts agree that it is better that you should at least just use 30% or less of your available credit limit.  It will help you avoid creating debt that you cannot pay for and keep your credit history and standing in good order.

Pay Your Bill On Time. Never miss out on a payment.  Contact your credit card company right away if you can’t make a payment – they will sometimes extend your due date and waive the late fees.  Make the minimum payment if you can and then pay off the rest next month.  If you miss a payment and do nothing about it, you will have a hard time rebuilding your credit history and that’s not going to look good when it’s time to take out that much-needed student loan.

Carefully Check Your Bills. Make sure that your account statements are correct.  Always report any errors or charges that you know you’ve never authorized to your credit card company ASAP.  Most credit card companies now allow you to view your account online.  Check it regularly so that you’re also aware of what you owe and when the bill is due. The Consumer Credit Act regulates all credit card companies, meaning that your card issuer has to listen to and act upon any complaints you may have.

Identity theft and unauthorized card use are some of the most common dangers in using credit cards.  Don’t leave your card lying around, keep your receipts in a safe place, don’t casually write down your credit card number on a scrap of paper or give it out over the phone, not unless the company is reputable and you made the call in the first place.  A little common sense, a lot of caution, a sense of responsibility and self-discipline can go a long way into making the use of your first credit card fun and worry-free.