7 Tips for Your First Credit Card (2024)

FAQs

What if 7 is the first number of credit card? ›

To begin building credit immediately, it is important to start making payments as soon as you can after making purchases. It is ideal to pay your card off each month. Some customers make a daily payment, weekly payment or a payment at the end of each month.

The 2/3/4 rule: According to this rule, applicants are limited to two new cards in a 30-day period, three new cards in a 12-month period and four new cards in a 24-month period. The six-month or one-year rule: Some issuers may only let borrowers open a new credit card account once every six months or once a year.

The first digit of the credit card number tells you if the card is from American Express (3), Visa (4), Mastercard (2 or 5), or Discover (6). Cards that begin with a 7 are gas cards, while 8 is for healthcare and telecommunications and 9 is often used by the government.

Pay your balance every month

Paying the balance in full has great benefits. If you wait to pay the balance or only make the minimum payment it accrues interest. If you let this continue it can potentially get out of hand and lead to debt. Missing a payment can not only accrue interest but hurt your credit score.

If you have good credit — a FICO score of 670 or higher — you'll likely be approved for a higher credit limit than you would with fair credit. That said, limits on these cards can still range from $500 to $1,000 for first-time cardholders, though you should be able to qualify for larger limits over time.

If you're just starting out, a good credit limit for your first card might be around $1,000.

Pay on time, in full, every single month

Many people see “minimum payment” on their bill and think that's the only amount that needs to be paid in order to avoid penalties. But the reality is, interest kicks in immediately for any unpaid balance. If you're just paying the minimum, you're losing.

Our 50/30/20 calculator divides your take-home income into suggested spending in three categories: 50% of net pay for needs, 30% for wants and 20% for savings and debt repayment. Find out how this budgeting approach applies to your money.

What is the 10 rule for credit cards? ›

The 20/10 rule follows the logic that no more than 20% of your annual net income should be spent on consumer debt and no more than 10% of your monthly net income should be used to pay debt repayments.

Paying off the debt on the card with the highest interest rate first is one method to reduce credit card debt. This is called the “debt avalanche method.” While some advocate for paying off your smallest debt first because it seems easier, you may save more on interest over time by chipping away at high-interest debt.

Card Verification Value (CVV)

On some cards, there may be seven digits in this spot. If this is the case, the first four digits you see are the last four digits of your credit card number. The last three digits in the grouping represent the CVV.

The first digit indicates the provider: Mastercard numbers start with a 2 or 5. Visa card numbers start with a 4. American Express numbers start with a 3.

So, while there is no absolute number that is considered too many, it's best to only apply for and carry the cards that you need and can justify using based on your credit score, ability to pay balances, and rewards aspirations.

Visa cards begin with the number 4. Mastercards start with the number 5. Discover Cards begin with the number 6.