FAQs About Your First Credit Card

Getting your first credit card is exciting, but before you start charging, it’s important to understand how to manage it so it helps you build your financial future instead of becoming a burden on it. If you have questions about using your credit card, talk to a representative at your credit union, who can provide advice about using your card to build good credit. Here are the answers to some questions that may be on your mind about making the most of your first credit card.

How can I pick a good credit card?

The most important numbers to consider when you are getting a credit card are the limit and the interest rate. The card limit is the amount of credit you have available. You can only spend the amount of credit you have. As you pay for something with your card, your available credit is reduced, and when you make a payment, the available credit is restored. The interest rate is the amount of money you are charged for using the credit. The higher the interest rate, the more expensive the credit is. You are charged interest whenever you have a balance on your credit card.

When do I have to make payments?

Credit cards require monthly payments. You should aim to pay off your entire balance each month, to avoid paying interest. If you can’t pay the balance in full, you must pay at least the minimum payment required by your card company to avoid late fees and other penalties.

How does a credit card affect my credit score?

If you keep your credit card debt below 30% of your available credit and you always pay on time, having a credit card can make your score increase, because it shows that you can manage credit effectively. If your card is charged to the limit and you make late payments, a credit card can have a significantly negative impact on your score.

GCS Credit Union offers a Visa Rewards credit card with a competitive interest rate and many other benefits. To learn more about joining our credit union in O’Fallon or how to apply for a credit card, please call (618) 797-7993.

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