Are You Ready for a Credit Card?

What many first time credit card users don’t realize is how beneficial proper credit card management can be. A credit card can be a great first-step to building a positive credit report.

What many first time credit card users don’t realize is how beneficial proper credit card management can be. A credit card can be a great first-step to building a positive credit report.

Having an excellent credit report and score makes you more likely to be approved for credit in the future and receive a lower rate (which will come in handy in if you want to buy a house someday), but it may also be easier for you to rent an apartment, get good rates on your insurance, and perhaps even get a job (yes, some employers check your credit).

It’s no accident that many of us WANT a credit card. After all, large companies and financial institutions pay a lot of money for flashy advertising.

It’s up to you to take a moment and think about if you really NEED to pump your wallet full of plastic. Ask yourself:

  • Can I currently pay for anything that I need with cash or a debit card?
    If so, you may not need a credit card.
  • Do I pay my existing bills on time?
    If you do, commit to always paying your credit card balance at the end of the month to minimize interest charges. This helps build your good credit history that will help you on later in life when getting loans or applying for a mortgage. Remember, your payment history is one of the largest factors in determining your credit score and this is a score that will follow you for the rest of your life.
  • What will you use the credit card for?
    Avoid using your credit card to finance your education, pay for living expenses or for purchasing things that you really do not need. A good way to decide if you should use the card is to ask yourself if you would pay for item(s) if you did not have the credit card. Deciphering what you want and need will eliminate a bunch of superfluous costs that can accumulate quickly when you are not paying attention. In the end, you will have to pay for whatever you charge and if you cannot do it when the bill comes in, you will spend more money than intended on those purchases with accumulating interest charges.

Stay Tuned for our next posting Choosing the Right Credit Card next week!

Use Credit Cards Wisely in College/Jeremy Vohwinkle

Credit Card Secrets You Can’t Live Without

You want to know the secret to successfully managing a credit card? I’m happy to tell you, it’s really not a secret. It basically boils down to simple common sense

You want to know the secret to successfully managing a credit card? I’m happy to tell you, it’s really not a secret. It basically boils down to simple common sense.

  • Stay out of debt.
    It doesn’t take long for a few purchases to add up to hundreds, even thousands, of dollars. Don’t charge more than you can afford to repay the balance when the bill arrives.
  • Pay it off.
    If you do get into debt, commit yourself to getting debt free as soon as possible. Pay more than the minimum, and don’t charge more on the cards until your balance is at zero.
  • Pay on time.
    If you miss a payment, your credit score can take a quick and hard hit. Furthermore, you may be charged a late payment fee and the late pay may stay on your credit report for years.
  •  Limit the number of cards you have.
    (2-4 is usually a good number.) The more open credit lines you have, the more you may be tempted to spend beyond your means. Also, applying for credit too often can hurt your credit score.

Stay tuned for our next posting Are You Ready for a Credit Card next week!

“The Road to Financial Independence: A Guide for 20-Somethings” BALANCE™ Financial Fitness Program. <>. 08 February 2013.

Your First Credit Card: A Q&A for the Real World

This is a guest post from Laura Edgar, a senior writer for NerdWallet, an unbiased personal finance website committed to improving your financial literacy.


It’s exciting to be a young adult! Chances are, your life is filled with many firsts, like living on your own, taking advanced biology classes, and managing your own finances. This is a great time to explore your world and try new things. It’s also the perfect time to get your first credit card. When used wisely, a credit card will help you build your credit history and credit score. At NerdWallet, we spend our days digging through credit card disclosures and answering the tough questions. Trust us: you’re not alone if you’re confused. You’ve already taken a great first step by coming to a not-for-profit credit union for your information. Here are some answers to the most commonly asked questions about credit cards.

 Why get a credit card?

A credit card offers you a secure and convenient way to make purchases. It will also help you build a credit history, which you’ll need when it comes time to buy your first car or apply for your first loan. You may even need a good credit score to rent a room or land a job. An increasing number of employers and landlords are requiring credit checks. Your credit score is literally your permanent record, so take it seriously. Use your credit card to make small, affordable purchases, not to buy things you can’t afford. You can certainly use your credit card to pay bills in an emergency, but always use this as a last resort.

What kind of credit card should I get?

For your first card, you’ll probably want a “starter card” or, if you’re a college student (part time totally counts), a college student credit card. Apple Federal Credit Union offers both. Their Credit Builder card offers a higher credit limit, but also requires you to put down money to secure it. You’ll get this money back when you close the account and graduate to a regular credit card. Apple FCUs Student credit card has a lower credit limit, but doesn’t require any money up front. Both cards have a very low APR, which is typical of credit union credit cards. You can read about each card in more detail here.

Should I pay attention to the APR or annual fee?

The APR is a percentage of your total balance, which you’ll have to pay in addition to your total balance if you rack up debt. You’ll never have to worry about the APR if you don’t carry a balance. That said, the higher the APR, the more debt you’ll have if you can’t make your payments. An annual fee is exactly what it sounds like: a yearly fee for the privilege of using a card. Apple Federal’s credit cards don’t have an annual fee, however.

Should I get a rewards credit card?

Rewards credit cards give you 1-5% back on your purchases. These cards also tend to have the highest interest rates. Rewards aren’t worth anything if you rack up debt. However, once you’ve spent a few years building your credit history and making regular payments, a rewards credit card is a great way to earn points or cash back for the purchases you make every day.

I’ve been told I need a cosigner. What does that mean?

If you’re at least 18 years old and have a full-time job, you can apply for a credit card on your own. If you’re under 21 and don’t have your own steady source of income, you’ll need to have your parent or guardian co-sign your application to get a card. This might sound annoying, but it usually gives you an edge. You’ll get to piggyback on your cosigner’s credit score, which may give you better options for credit cards.

What’s wrong with making minimum payments?

Your credit card statement will include a minimum payment option. If you like, you can pay this smaller amount and still be “in the clear” with your credit card issuer. However, this is exactly how people get into trouble and rack up debt. Don’t fall into the “spend now, pay later” mindset. When you incur debt, you are paying for the privilege of spending money you don’t have. Debt damages your credit score, which makes people less likely to lend to you in the future, and gets very, very expensive.

What if I have more questions?

That’s great! We’re serious; you should know exactly what you’re getting into before you sign up for a credit card. Make sure you read all the disclosures before you apply for anything. You can also stop by your local Apple FCU branch and ask a representative to help you. They can help you pick the right card for your needs and increase your chances of being accepted.