How to manage your first Credit Card

a young business woman holding new credit cardBy Alyssa Furtado,

Special to the Financial Independence Hub

When you become an adult is a matter of opinion. It could be when you turn 18, move out of your parents’ home, or land your first job. But for some, they joke that you’re not really an adult until you get your first credit card. I don’t know where the joke originated from but from a financial standpoint, getting your first credit card is practically a life event.

Depending on what province or territory you live in, you can legally get a credit card at the age of 18 or 19. Unfortunately, at that age, many of us aren’t making sound financial decisions, which is why you might be tempted to sign up for a new card on your college/university campus or even inside a grocery store or mall.

What credit card you select and the benefits it offers could affect you in the long run. So it’s a good idea to understand how to manage your first credit card before signing up for the first offer available to you.

Picking the right card

Receiving a free t-shirt or a travel mug may be tempting but if that’s the reason you’re signing up for a credit card, you can do a lot better. With your first credit card you need to think about your spending habits before applying.

If you know you’re going to need to carry a balance, a low-interest card might be a better solution for you. Alternatively, if you plan on using this card to build your credit score and you’ll be paying off the full balance every month, you might as well pick a card that offers you some benefits that you’ll use.

Keep in mind that since this is your first credit card, you won’t necessarily be approved. Some credit cards require a minimum income while some providers may not approve you if you currently don’t have a credit history.

Managing your expenses

Getting a credit card is the easy part, managing your expenses is a little trickier. When using credit cards, it’s easy to go over budget since you’re not physically seeing any money leave your wallet. To keep your spending in check, log in to your online account every few days to track your spending and to look for suspicious activity. It may sound excessive but fraud prevention is something to take seriously.

Once you get your first statement, don’t get too excited about the low minimum payment. If you look closely at your statement, it’ll show you exactly how long it’ll take you to pay off your full balance if you only make the minimum payment. Do you really want to spend a few years paying for that new TV?

More importantly, if you pay anything less than the full balance, you end up paying interest. Most credit cards charge 19.99% interest while low-interest credit cards start at around 13%. Either way, that’s a lot of extra money you’ll be paying for your purchases. It’s also very easy to just make minimum payments so always make sure to pay your balance on time each and every month.

Also, don’t even think about getting a cash advance. The interest rate is often higher than your regular rate and the interest kicks in the second you make a withdrawal.

The bottom line

When used responsibly, credit cards can be a great tool. They help you build your credit score and depending on what card you choose, the rewards earned can give you an immediate benefit. That being said, keep in mind that it’s been proven that consumers spend more when using credit instead of cash. Also, your rewards are no longer free if you’re paying interest on your card.

FurtadoAlyssa Furtado is a passionate entrepreneur, financial expert, digital marketer and educator and founder of, a website that compares Canadian mortgage ratescredit card deals, deposit rates and insurance. Its goal is to empower Canadians to search smarter and save money.


Leave a Reply