Getting your first credit card can make you feel like you have superpowers — like you can BUY ALL THE THINGS — but of course, you're still just you and shouldn't be buying "all" of anything probably.
Much like the angel and devil on your shoulder scenario, there are pros and cons of having a credit card, and today, I want to share five things you definitely should NOT be doing with any credit card (and spoiler alert — most people do these things all the time).
Go crazy with spending
Please don't. Just don't. Most people who get approved for credit cards with huge credit lines see all those zeros and feel an incredible urge to go on a spending spree. Not only is this a great way to fall into debt rapidly, it will be a painful wake-up call when it comes time to pay the bill.
Charges on your credit card should be treated the same as purchases you make with checks or cash. If you don't have the funds to pay off the item, think twice about whether you really need it or not. Credit cards, as a whole, are great and offer several benefits, but still, if you fail to pay them off, you'll rack up interest charges and it will be increasingly difficult to pay off.
Pay just the minimum payment
As with many things in life, doing the minimum is never usually the best idea.
I have some friends who usually only make the minimum payment because they argue, "Why pay more than I have to?" I get where you're coming from, but going this route can become a big headache really quickly.
This is because regularly paying just a fraction of what you actually owe will likely mean you'll rapidly accumulate debt and have a hard time paying it all off. Next time you find yourself thinking about making a minimum payment, ask yourself if you'd be cool with paying hundreds of additional dollars in interest payments on that item.
What's a late payment here or there? If I had a nickel every time I heard this one. The truth is, if you occasionally make a late payment with bills like utilities, rent, etc., it's usually not a big deal, but if you pay your credit card bill late, it's a different story.
You'll likely get hit with a huge late fee, a penalty interest rate, and damage to your credit score. Sounds awful, right? It is. Thankfully, it's really easy to avoid late payments. Try setting up email alerts, text reminders, and make big circles on your calendar if you have to!
Ignore the bills
When has this ever been a good idea? Never. But, you'd be surprised by how many people do it. I recognize that it can be tempting to ignore credit card statements when you've gotten a little spend-happy with your cards, but just "hoping" the bill will go away never works. Never.
(Did I use the word "never" enough here? Yeah, probably overkill, but making the point is really important here.)
Loan your card to a friend
Your card is your card, and you shouldn't give it out to anyone. Period.
I've seen one-too-many people fall into a scenario where they've been burned by someone they lent their credit card to. Even friends with the best intentions can sometimes drop the ball when it comes to someone else's finances.
If you absolutely need to have someone make charges to your account, nearly every credit card issuer will allow you to order additional cards for authorized users at no charge. By adding them as an authorized user, you'll be able to track the charges they make to your account. Just remember — all of the charges are ultimately your responsibility, so guard your accounts responsibly.