The Credit Card Blueprint

Having a credit card can be crucial for your financial success. It can help you build credit and earn rewards all while making your regular purchases.

First Steps

The first step is to choose the right card for you. At Education First, we offer our Visa Platinum and Rewards First Visa Credit Cards. For more information on our credit card offerings, click here. 

Different credit cards offer various types of rewards. Some cards reward you with travel points, while others offer high cash-back percentages. It's smart to avoid cards that charge annual fees or have very high interest rates. 

Once you've determined what you're looking for in a credit card, you need to ensure that you will be approved for that card. If your credit score is too low, the company will deny your application, and your score could drop even lower. If you have a lower credit score, it's best to choose a basic introductory credit card to make sure that you will be approved. 

I Have a Credit Card, Now What?

Now that you have a credit card, it's time to learn how to manage it properly. If you're trying to boost your credit score, you'll want to pay off your full balance each month. Otherwise, your credit score can start to drop, and you can slip into a situation where you'll be in debt. If you pay off the full balance each month, your credit score will rise, and you won't have to worry about any interest charges. 

When you're approved for a credit card, you are given a credit limit as well. This is the maximum amount of money the credit card company will allow you to borrow at one time. This number may excite you, knowing that you can spend that much each month, but the closer you get to your credit limit, the lower your credit score can get. 

A good rule of thumb is to keep your credit utilization ratio below 30%. A credit utilization ratio is the percentage you use of your available credit. The higher your credit utilization ratio is, the more likely creditors will view you as a high-risk borrower. You'll want to do your best to keep your spending under 30% of your credit limit or pay it off as much as possible each month.

Don't Be Afraid To Spend

Although there are some precautions to take, don't be afraid to use your credit card. Regularly paying off your card and continuing to spend it on shows creditors that you can be trusted to borrow and repay money responsibly. A credit card has revolving credit, meaning as soon as you pay back what you borrowed, you can borrow it again. 

Continuing to Build Credit

Once you're comfortable with your credit card, you can build your credit score further by borrowing more. Auto loans, mortgages, and other kinds of loans can also have a positive impact on your score. The more borrowing history you have, the better, as long as you have a good payment history. 

If you're looking to build credit or just looking for rewards, opening a credit card is rarely a bad idea, as long as you know how to manage it properly.