5 mistakes to avoid when you get your first credit card
Editor's Note
Credit cards can make your life easier in many different ways when you use them responsibly. A well-managed credit card can help you build good credit, give you a valuable welcome bonus, offer you purchase protection and help you travel the world courtesy of the points and miles you earn along the way.
Yet despite the many potential benefits, there are certain mistakes you’ll want to avoid when using credit cards. Fortunately, you can learn from others’ experiences when you get your first credit card and try to avoid those same negative situations.
Here are five of the top mistakes people make when they get their first credit card, along with tips on avoiding these blunders yourself.
Paying late
One of the biggest mistakes you can make in credit card management is paying your bill after the due date. Late payments on credit cards could trigger several negative consequences, including late fees and having the card issuer increase the annual percentage rate on your account to the penalty interest rate.
If you fall 30 days or more behind on your payment, the credit card company could report your account as late to the credit bureaus. Late payments can remain on your credit report for up to seven years, potentially damaging your credit score. If you fall far enough behind on your credit card payment, your card issuer may opt to close your account.
Related: When you should (and shouldn’t) worry about a credit score drop
Not paying the full balance
Another blunder you want to avoid when you open your first credit card is paying less than the full balance on your account each month. Paying your statement balance off each billing cycle is one of TPG’s 10 commandments of credit card rewards — and for good reason.
This habit can help you avoid paying expensive interest charges. Furthermore, paying off your credit card balance each month may help you protect your credit score.
The relationship between your credit card limits and balances (known as your credit utilization ratio) has a meaningful impact on your credit score. The lower your credit utilization ratio, the better your credit score.
A consistent habit of paying off your credit card balances could help you maintain a low credit utilization ratio, especially if you pay off your card balances before the statement closing date when your card issuer updates the account with the credit bureaus.
Related: Is 30% credit card utilization the magic number?
Overspending
If you want to avoid credit card debt and be able to afford to pay off your statement balance each month, it’s critical to avoid overspending on your credit card account.
However, if you’ve spent your whole life using cash and debit cards, it might take some practice to adjust to how credit cards work (at least from a budgeting perspective).
Unlike a debit card, you can’t “see” when your credit card goes into the red (meaning you’ve spent more than your budget allows you to pay off each month).
On a positive note, there are numerous budgeting apps you can use to track your spending so you can enjoy the perks that credit cards have to offer without taking on the burden of credit card debt in the process.
Related: 9 things people misunderstand about traveling on a budget
Only making minimum payments
Whether you’re a new credit card user or a seasoned pro, paying just the minimum amount due on your credit card bill is another critical mistake to avoid. In February 2025, the average credit card interest rate on interest-assessing accounts was nearly 22%, according to the Federal Reserve.
So, if you roll an outstanding balance on your account from one month to the next, your debt levels have the potential to skyrocket in a hurry.
Being in credit card debt can cost money in hidden ways as well. Not only could you pay hundreds or thousands of dollars over time in extra interest charges from revolving credit card debt, but you also risk damaging your credit score. Lower credit scores can lead to higher interest rates on loans and credit cards, making it more expensive to borrow money in the future.
If you need to carry a balance on a card, consider a card with an introductory 0% APR period.
Related: Should you carry a balance on zero APR cards?
Getting a card without rewards
As someone new to credit and still working to establish a good credit score, it can be difficult to qualify for top-tier rewards credit cards. Issuing banks often require applicants to have an established credit history and a solid credit score to be eligible for premium rewards credit cards.
Yet, there are many credit cards available to people just starting in the credit card space, and it’s often possible to find options that offer some form of rewards.
When you start your credit-building journey, you might need to consider mid-tier credit cards with lower annual fees and moderate welcome bonuses.
Nonetheless, the rewards you can earn on your everyday spending can still be miles ahead (pun intended) of the debit card or cash you would otherwise be using to pay for your next transaction.
Related: Credit vs. debit cards: Which is the smarter choice?
Bottom line
With some planning, it’s easy to avoid common credit card mistakes that could cost you money and damage your credit score. Once you feel ready to handle a credit card, it’s a good idea to review your credit reports and scores before you start filling out applications for new accounts. If you discover any errors on your credit reports, remember to dispute them with the appropriate credit bureau.
After you confirm that your credit is in decent shape, you can search for the best credit card for you. Once you open your first credit card account, refer back to the above tips to ensure you manage it wisely and set yourself on a path to building even better credit for the future.
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Recommended Credit
Why We Chose It
There’s a lot to love about the Amex Gold. It’s a fan favorite thanks to its fantastic bonus-earning rates at restaurants worldwide and at U.S. supermarkets. If you’re hitting the skies soon, you’ll also earn bonus Membership Rewards points on travel. Paired with up to $120 in Uber Cash annually (for U.S. Uber rides or Uber Eats orders, card must be added to Uber app and you can redeem with any Amex card), up to $120 in annual dining statement credits to be used with eligible partners, an up to $84 Dunkin’ credit each year at U.S. Dunkin Donuts and an up to $100 Resy credit annually, there’s no reason that foodies shouldn’t add the Amex Gold to their wallet. These benefits alone are worth more than $400, which offsets the $325 annual fee on the Amex Gold card. Enrollment is required for select benefits. (Partner offer)Pros
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- 3 points per dollar spent on flights booked directly with the airline or with amextravel.com
- Packed with credits foodies will enjoy
- Solid welcome bonus
Cons
- Not as useful for those living outside the U.S.
- Some may have trouble using Uber and other dining credits
- You may be eligible for as high as 100,000 Membership Rewards® Points after you spend $6,000 in eligible purchases on your new Card in your first 6 months of Card Membership. Welcome offers vary and you may not be eligible for an offer. Apply to know if you’re approved and find out your exact welcome offer amount – all with no credit score impact. If you’re approved and choose to accept the Card, your score may be impacted.
- Earn 4X Membership Rewards® points per dollar spent on purchases at restaurants worldwide, on up to $50,000 in purchases per calendar year, then 1X points for the rest of the year.
- Earn 4X Membership Rewards® points per dollar spent at US supermarkets, on up to $25,000 in purchases per calendar year, then 1X points for the rest of the year.
- Earn 3X Membership Rewards® points per dollar spent on flights booked directly with airlines or on AmexTravel.com.
- Earn 2X Membership Rewards® points per dollar spent on prepaid hotels and other eligible purchases booked on AmexTravel.com.
- Earn 1X Membership Rewards® point per dollar spent on all other eligible purchases.
- $120 Uber Cash on Gold: Add your Gold Card to your Uber account and get $10 in Uber Cash each month to use on orders and rides in the U.S. when you select an American Express Card for your transaction. That’s up to $120 Uber Cash annually. Plus, after using your Uber Cash, use your Card to earn 4X Membership Rewards® points for Uber Eats purchases made with restaurants or U.S. supermarkets. Point caps and terms apply.
- $84 Dunkin' Credit: With the $84 Dunkin' Credit, you can earn up to $7 in monthly statement credits after you enroll and pay with the American Express® Gold Card at U.S. Dunkin' locations. Enrollment is required to receive this benefit.
- $100 Resy Credit: Get up to $100 in statement credits each calendar year after you pay with the American Express® Gold Card to dine at U.S. Resy restaurants or make other eligible Resy purchases. That's up to $50 in statement credits semi-annually. Enrollment required.
- $120 Dining Credit: Satisfy your cravings, sweet or savory, with the $120 Dining Credit. Earn up to $10 in statement credits monthly when you pay with the American Express® Gold Card at Grubhub, The Cheesecake Factory, Goldbelly, Wine.com, and Five Guys. Enrollment required.
- Explore over 1,000 upscale hotels worldwide with The Hotel Collection and receive a $100 credit towards eligible charges* with every booking of two nights or more through AmexTravel.com. *Eligible charges vary by property.
- No Foreign Transaction Fees.
- Annual Fee is $325.
- Terms Apply.
Rewards Rate
| 4X | Earn 4X Membership Rewards® points per dollar spent on purchases at restaurants worldwide, on up to $50,000 in purchases per calendar year, then 1X points for the rest of the year. |
| 4X | Earn 4X Membership Rewards® points per dollar spent at US supermarkets, on up to $25,000 in purchases per calendar year, then 1X points for the rest of the year. |
| 3X | Earn 3X Membership Rewards® points per dollar spent on flights booked directly with airlines or on AmexTravel.com. |
| 2X | Earn 2X Membership Rewards® points per dollar spent on prepaid hotels and other eligible purchases booked on AmexTravel.com. |
| 1X | Earn 1X Membership Rewards® point per dollar spent on all other eligible purchases. |
Intro Offer
You may be eligible for as high as 100,000 Membership Rewards® Points after spending $6,000 in eligible purchases on your new Card in your first 6 months of Membership. Welcome offers vary and you may not be eligible for an offer.As High As 100,000 points. Find Out Your Offer.Annual Fee
$325Recommended Credit
Credit ranges are a variation of FICO® Score 8, one of many types of credit scores lenders may use when considering your credit card application.Excellent to Good
Why We Chose It
There’s a lot to love about the Amex Gold. It’s a fan favorite thanks to its fantastic bonus-earning rates at restaurants worldwide and at U.S. supermarkets. If you’re hitting the skies soon, you’ll also earn bonus Membership Rewards points on travel. Paired with up to $120 in Uber Cash annually (for U.S. Uber rides or Uber Eats orders, card must be added to Uber app and you can redeem with any Amex card), up to $120 in annual dining statement credits to be used with eligible partners, an up to $84 Dunkin’ credit each year at U.S. Dunkin Donuts and an up to $100 Resy credit annually, there’s no reason that foodies shouldn’t add the Amex Gold to their wallet. These benefits alone are worth more than $400, which offsets the $325 annual fee on the Amex Gold card. Enrollment is required for select benefits. (Partner offer)Pros
- 4 points per dollar spent on dining at restaurants worldwide and U.S. supermarkets (on the first $50,000 in purchases per calendar year; then 1 point per dollar spent thereafter and $25,000 in purchases per calendar year; then 1 point per dollar spent thereafter, respectively)
- 3 points per dollar spent on flights booked directly with the airline or with amextravel.com
- Packed with credits foodies will enjoy
- Solid welcome bonus
Cons
- Not as useful for those living outside the U.S.
- Some may have trouble using Uber and other dining credits
- You may be eligible for as high as 100,000 Membership Rewards® Points after you spend $6,000 in eligible purchases on your new Card in your first 6 months of Card Membership. Welcome offers vary and you may not be eligible for an offer. Apply to know if you’re approved and find out your exact welcome offer amount – all with no credit score impact. If you’re approved and choose to accept the Card, your score may be impacted.
- Earn 4X Membership Rewards® points per dollar spent on purchases at restaurants worldwide, on up to $50,000 in purchases per calendar year, then 1X points for the rest of the year.
- Earn 4X Membership Rewards® points per dollar spent at US supermarkets, on up to $25,000 in purchases per calendar year, then 1X points for the rest of the year.
- Earn 3X Membership Rewards® points per dollar spent on flights booked directly with airlines or on AmexTravel.com.
- Earn 2X Membership Rewards® points per dollar spent on prepaid hotels and other eligible purchases booked on AmexTravel.com.
- Earn 1X Membership Rewards® point per dollar spent on all other eligible purchases.
- $120 Uber Cash on Gold: Add your Gold Card to your Uber account and get $10 in Uber Cash each month to use on orders and rides in the U.S. when you select an American Express Card for your transaction. That’s up to $120 Uber Cash annually. Plus, after using your Uber Cash, use your Card to earn 4X Membership Rewards® points for Uber Eats purchases made with restaurants or U.S. supermarkets. Point caps and terms apply.
- $84 Dunkin' Credit: With the $84 Dunkin' Credit, you can earn up to $7 in monthly statement credits after you enroll and pay with the American Express® Gold Card at U.S. Dunkin' locations. Enrollment is required to receive this benefit.
- $100 Resy Credit: Get up to $100 in statement credits each calendar year after you pay with the American Express® Gold Card to dine at U.S. Resy restaurants or make other eligible Resy purchases. That's up to $50 in statement credits semi-annually. Enrollment required.
- $120 Dining Credit: Satisfy your cravings, sweet or savory, with the $120 Dining Credit. Earn up to $10 in statement credits monthly when you pay with the American Express® Gold Card at Grubhub, The Cheesecake Factory, Goldbelly, Wine.com, and Five Guys. Enrollment required.
- Explore over 1,000 upscale hotels worldwide with The Hotel Collection and receive a $100 credit towards eligible charges* with every booking of two nights or more through AmexTravel.com. *Eligible charges vary by property.
- No Foreign Transaction Fees.
- Annual Fee is $325.
- Terms Apply.