Credit Card 101: A Beginner’s Guide to Using and Choosing Your First Credit Card

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A person weighing their options after learning the ins and outs of choosing your first credit card

A credit card is a valuable financial tool that offers greater security and flexibility while enabling you to build credit and earn rewards with each purchase. But it is crucial to understand how this financial tool works to use it responsibly when choosing your first credit card. At Camino Federal Credit Union, we have been serving Montebello since 1941 with great  rates, loan terms, and attentive customer service. Our passion is supporting our members when starting their financial journey to build a bright financial future. 

Are you looking for a beginner Credit Card? If so, the Getting Started Visa at Camino is a great option. Read our blog for Credit Card 101 to learn the ropes when choosing and using your first credit card. 

How Do Credit Cards Work?

When choosing your first credit card, you need to understand how they work before making decisions. Credit cards are tied to credit accounts at your financial institution. You may use a credit card to purchase anything, as long as the business accepts credit cards. 

When you make a charge to a credit card, you are borrowing that money from the institution and must pay it back. Your balance is what you owe. For example, if you purchase something for $300, your balance increases by that amount. 

Credit cards have a credit limit, which is the maximum you can owe on a card at one time. Imagine your balance is $1,500. In this situation, your balance cannot surpass this amount. Your available credit is the difference between your limit and balance.

In this hypothetical situation, you have a credit limit of $1,500 and a $300 balance. Your available credit would be $1,200. If you have reached your limit, after you make a payment on your card, you will have more available credit to borrow from. 

What is APR?

APR stands for annual percentage rate and is the cost of borrowing money, or the interest rate. You can avoid paying interest by paying your card’s full balance monthly, meaning you won’t pay interest on purchases you make.  

Imagine your credit card has an APR of 15%, with a balance of $900. 15% of $900 is $135. If you leave that balance on your card, it would grow to $1,035 after one year. If you pay the full balance when it is due, you won’t receive any interest charges. 

Still, you couldn’t leave that balance for an entire year. If you fail to make at least minimum payments monthly, you will incur fees and other penalties.  

Building Credit

When you have received your first credit card, you must use it responsibly to start building credit and improving your credit score. Credit scores generally range from 300 (poor) to 850 (perfect). To build credit, you should:

  • Pay on time and in full
  • Avoid charging more than you can afford
  • Monitor your FICO score
  • Keep balances low
  • Ask for credit limit increases (after 12 months)
  • Keep your account open
  • Apply for new credit cards selectively
  • Avoid canceling a card before opening a new card

What Should You Look for in Your First Credit Card?

Beginner credit cards, like the Getting Started Visa with Camino Federal Credit Union, often have benefits tailored to beginner credit card users. Features to look for when choosing your first credit card include:

  • No annual fees
  • A (free) FICO Score tracker
  • No (or minimum) security deposit requirements
  • Perks, rewards, and bonuses

Apply For a Beginner Credit Card Today

A credit card is a powerful financial tool to access future opportunities, but it is essential to use it responsibly and choose the right card for you and your needs. When choosing your first credit card and partnering with a reputable financial institution like Camino Federal Credit Union for a Getting Started Visa, you receive attentive customer service, low variable rates, and no annual fees, making this a great tool for your financial arsenal.
To learn more, visit us at, call us at 800-835-3400, or apply on our Getting Started Visa page to start building a bright financial future.