5 Credit Card Basics For Newbies

Credit Card

Credit cards let you afford everyday spending as well as hefty EMIs, but owning a credit card is a challenge. 

The convenience and freedom that credit cards offer can soon become the reason for your debt if handled differently. Considering this, one must understand the bare fundamentals of owning a credit card.

If you are a new credit card user, this article will help you find the most important five basics.

Don’t Overuse The Limit

Nothing comes without a limit, not even a credit card. Lenders don’t want you to spend more than you can pay that’s why the limit. Exceeding that limit can be a serious mistake. 

Thus, you should control that urge to spend while shopping for your favorite brand. Moreover, you can follow the thumb rule of using below or at least 30% of the credit limit

Many financial experts believe one should have a budget and commit to it because if you don’t budget your purchases, you won’t even realize that you exhausted the limit.

Set an Autopay

How promptly and timely you repay the credit card bill determines how well your credit score is. As a result, while delayed payments can bring down your score leading to penalties, timely payments can contribute towards a better score.

Setting an autopay instruction is a simple way to ensure that your bills get paid on time every month. 

Moreover, you can transfer the “minimum amount due”, the entire outstanding balance or a specific sum every month from your bank account. Enabling autopay is a good decision as it ensures your payment history remains on track, even when you forget to pay the bills.

Do Not Pay the Bill in Installment

While several banks provide options to pay the bills in installments, it is best to pay in full to avoid the chances of going into debt. Paying in installments is convenient, but due to the piling interest, it can end up costing you more in the long run. 

However, due to some circumstances, if you are unable to pay the whole amount, aim to pay more than the minimum amount to reduce the interest charges. 

Always make such decisions wisely. While the financial journey can seem challenging at a young age, you can seek help from budgeting and tips to invest.  

Check Credit Card Charges Regularly

It is a good practice to keep track of your credit card charges, not only because it will help control your expenditures but also because it can save you from potential fraud

If you detect any suspicious activity on your account immediate action is a must. Thus, making a habit of checking the charges is crucial. To make it easy for the users, banks provide apps on which one can check the transactions without visiting the bank and asking for the paper statement. 

Additionally, you can sign up for transaction alerts. These alerts will notify you about suspicious charges, remind you of the approaching due date or if you are about to exhaust your credit limit. 

Reconsider Canceling Your Card

You might be considering canceling your first card and buying a new one, but let us stop you right there! Canceling your card can decrease the length of your “payment history” and increase your “credit utilization ratio”, affecting your credit score. 

However, if you want to cancel your card because of the large amount you pay as an annual fee, it is recommended to talk to the issuer and change it to a no-annual-fee option. 


Owning a credit card is not as simple as it sounds. It has its own perks and limitations. The card can either flourish your business or put you in debt.

To make the most of your card, follow these five basics can help you use the card responsibly. Most importantly, do not forget to pay only for things that you can actually afford.