How to use your credit card to establish a good credit history

If you're young and just starting out credit cards are certainly convenient and can help you establish a good credit history, which will be important when you need to make major purchases down the road. However, carrying a credit card comes with big responsibilities. Here are some tips on how to use your credit card wisely. Choosing the right credit card When selecting a credit card, you should consider your own needs. For example, if you're going to be carrying a balance (not paying off the entire bill each month) then it is imperative to seek out the lowest interest rates that you can find. But you may be limited by a few circumstances, one of which is your paycheque. Some credit cards require a minimum income level or charge an annual fee. High limit credit card could be a recipe for disaster. Signing on the dotted line is fun. No money comes out of your bank account and no cash comes out of your wallet. Shopping has never been so easy. That's why when starting out the best credit cards are the ones that have low spending limits, unless you can afford to pay for any of the charges that are made on it. Just about all credit cards offer some type of incentives such as rewards points or cash back incentives. This is done for obvious reasons. The most common of which is to entice the cardholder into using it more often. Overall it is a pretty good deal to receive rewards for credit card charges as long as you bear in mind that this is not free money. Whether you realize it or not, you have already paid for those points. Managing your credit card account. Managing your account online is a great feature; just about every body has access to the Internet and can easily access their credit card statements. Studying your credit card statement You'll receive a statement that details what you've bought and what you need to pay. The purchases you've made will be tallied, just like on a bank statement. You'll need to pay attention to: