What My First Credit Card Taught Me

Written by Hazel Pankratz

Thursday, June 25th, 2020

When I was in grade school, I came across my fair share of guidance counsellors with a flair for the dramatic — and topics like personal finance and building credit often came up during their class visits.

We often learned about why it was important to have good credit, but I never quite understood the how, aside from the recommendation to "get a credit card" and the potential danger of being unable to secure loans and mortgages in the future.

Needless to say, statements this extreme didn't help the already irrational anxiety I had about managing money once I became an adult — but it did cement getting my first credit card as a watershed moment in my financial coming-of-age.

Getting and Using My First Credit Card

I knew nothing about the ins and outs of having credit, or how it worked, or what I should look for once I began shopping around. I ended up waiting an entire year after I turned 18 before I even thought about applying for a credit card. Even then, once I got it, I was almost afraid to use the thing. For months, I barely touched it.

Then, at the start of second year, my laptop broke.

The hard drive was fried and I had to replace it, but I didn't have all the money together to pay for it right away. I essentially had the option to choose between waiting a few months to gather the funds to replace my computer, or to use my credit card to replace it. I had a lot of school work to complete and decided to use my credit card to buy it as soon as possible. I replaced my computer, but had to carry a balance on my card for two months and racked up a bit of interest. I did pay it off, though, and I haven't carried a balance since.

Having to pay interest wasn't ideal, but I worked hard and paid off what I owed as fast as I could.

Getting Comfortable With My Credit Card

The laptop incident really showed me how misplaced my anxieties were, so I decided to start using my credit card to pay monthly bills. It helped me establish a good payment history. I also became more aware of my monthly payment date, and made sure to pay off my card on time. Once I got into the routine of paying my card off every month, using my credit card was smooth sailing.

Knowing What My Credit Card Offers

Do you know the different benefits/offers you get on your credit card? Does your credit card offer cashback or rewards? When you're new to credit cards, you don't always know what your card offers. Make sure to familiarize yourself with what you have so you can make the most of it.

Learning About My Credit Score

Even after I got into the swing of using my credit card, I still didn't know very much about my credit score. Cue that grade school anxiety again! I'm trying to learn more about what my credit score means and about credit utilization, because I think they're only going to become more important as I get older.

Borrowing in the Future

Upon the completion of my undergraduate studies, the question of credit came up again as I started researching student loans and other funding options for grad school.

It's stressful, of course, but I'm preparing myself as much as I can. It's hard to believe how pivotal a role my first credit played in developing my financial independence.

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