Your First Credit Card: The Basics

Step-by-step guide

1. 1

   Understand what credit means

   A credit card is borrowed money you must repay. It's not 'extra money'—every purchase needs to be paid back with interest if not paid in full.

2. 2

   Choose a student or low-limit card

   Look for cards with no annual fee, low interest rates, and credit limits of $500-$1000. Many banks offer student cards with rewards.

3. 3

   Make a payment plan

   Only charge what you can pay off in full each month. Set up automatic payments for at least the minimum, but always aim to pay the full balance.

4. 4

   Monitor your spending

   Check your balance weekly. Set up alerts for large purchases. Keep your credit utilization under 30% of your limit to build good credit.