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How To Responsibly Use Your First Credit Card

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It is exciting to find out that you have been approved for a credit card. However, it is important for you to be responsible when you use a credit card. There are several ways that you can avoid maxing out your credit card.

You should avoid using your credit card for everyday purchases. You will need to make sure that you pay your bill on time each month. The positive credit reports will help you build your credit history.

You will also need to make sure that you pay your credit card bill in full each month. If this is your first credit card, then you probably do not have a lot of things in your credit history. That is why credit card companies will typically give you a lower limit. Banks have to be careful because giving out high credit limits is risky for them.

If you pay your bills on time and in full, then you will likely be able to get a higher credit limit within 12 months. Your credit score and the percentage of the credit limit that you are using will determine whether you get your credit limit raised. On the other hand, missing payments can cause your credit limit to decrease.

You will also need to make sure that you keep your credit card balance low. If you have a high balance, then your credit utilization ratio will go up. You want to keep this number under 30 percent.

For example, you have a credit card with a $600 credit limit. You do not want to spend more than $200. Additionally, you will need to make multiple payments each month. This will help you pay your credit card off faster and prevent the balance from getting too high.

It is important to note that you do not have to be stuck with a low credit limit forever. You can ask for a higher limit. If you have been paying on time for a few months, then you will likely be approved for a higher limit.

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