3 mistakes people make when they get their first credit card

Jan 16, 2021

This post contains references to products from one or more of our advertisers. We may receive compensation when you click on links to those products. Terms apply to the offers listed on this page. For an explanation of our Advertising Policy, visit this page.

Editor’s note: This is a recurring post, regularly updated with new information.

We here at TPG love credit cards. From massive sign-up bonuses to increased consumer protection, no matter what you’re looking for, there’s a credit card out there for you. But like many of you, I started out my credit card journey at the tender age of 18 with no clue how they worked or how I should use them — and I paid for it. Here are three top mistakes people make (including myself) when they get their first credit card.


(Photo courtesy of Hero Images via Getty Images)
(Photo courtesy of Hero Images via Getty Images)

If you’ve spent all your life using cash or a debit card, you’ll likely have some shock the second that plastic falls into your hands. Why? Because when you use your cash, it’s gone. Similarly, transactions are deducted in real-time (or near real-time) from your debit card, which means you can both see (and feel, with overdraft charges) when your account goes into the red.

The same cannot be said for credit cards, whose credit limits can range into the tens of thousands. Now, if you’re anything like me, you probably received your first card, got dollar signs in your eyes, and promptly maxed it out on some impulse purchase. As I was working a part-time job at a fast-food restaurant, there was absolutely no way I was going to pay it all off when my statement came due, which leads me to the second mistake:

Only making minimum payments

Image courtesy of 1820796/ Pixabay.
(Image courtesy of 1820796/ Pixabay)

Like I stated above, as soon as I got my first credit card I went wild- and that’s normal. Without someone teaching me about fiscal responsibility, there was absolutely no reason why I would know not to spend all that money. Unfortunately for me, a reality check came in the form of my balance due at the end of the month.

With thousands of dollars racked up on my credit card and only a part-time job to pay it off, I resorted to doing what most people do. I made my minimum payments, but that was it. I’m sure most of you are cringing right now and so am I. With interest rates as high as 30% (or more!) per month, making minimum payments on your credit card becomes very costly, very quickly.

Using a credit card instead of cash due to its additional benefits is only the best option when you can pay your bill in full each month. Otherwise, you’re simply losing money to interest payments.

Getting a card without rewards

(Photo by Isabelle Raphael / The Points Guy)
(Photo by Isabelle Raphael / The Points Guy)

As it stands, I’m a regular credit cards guru. I can list you the benefits of my favorite travel cards and recommend the best card for Amazon purchases without breaking a sweat. But when I got my first card? I walked into my local bank and signed up for the card featured on its brochure, which was marketed to first-time cardholders.

Unfortunately, that meant I was putting all my spend on a credit card that gave me nothing in return. No points, no cash back — all I was doing was spending money I didn’t have and paying interest as the result.

It can be difficult for those without established credit to acquire top-tier rewards cards, I’m not debating that. Often, banks will want a credit history and a proven track record of paying your debts. But that doesn’t mean that you can’t get a card that is rewarding. There are tons of credit cards available to those who are just starting to get into the rewards card game. Often, they’re mid-tier cards with lower annual fees and moderate sign-up bonuses, but either way, they’re miles ahead of that interest generating debit card you’ll otherwise be holding.

Bottom line

It’s easy to fall into the credit card trap, but avoid these mistakes and save yourself some money while not leaving any cash on the table. Next up? Putting those rewards to use on hotels, flights and vacations.

Additional reporting by Carissa Rawson

Featured image courtesy of bohed/ Pixabay.

Chase Sapphire Preferred® Card

WELCOME OFFER: 80,000 Points


CARD HIGHLIGHTS: 2X points on all travel and dining, points transferrable to over a dozen travel partners

*Bonus value is an estimated value calculated by TPG and not the card issuer. View our latest valuations here.

Apply Now
More Things to Know
  • Earn 80,000 bonus points after you spend $4,000 on purchases in the first 3 months from account opening. That's $1,000 when you redeem through Chase Ultimate Rewards®. Plus earn up to $50 in statement credits towards grocery store purchases within your first year of account opening.
  • Earn 2X points on dining including eligible delivery services, takeout and dining out and travel. Plus, earn 1 point per dollar spent on all other purchases.
  • Get 25% more value when you redeem for airfare, hotels, car rentals and cruises through Chase Ultimate Rewards®. For example, 80,000 points are worth $1,000 toward travel.
  • With Pay Yourself Back℠, your points are worth 25% more during the current offer when you redeem them for statement credits against existing purchases in select, rotating categories.
  • Get unlimited deliveries with a $0 delivery fee and reduced service fees on eligible orders over $12 for a minimum of one year with DashPass, DoorDash's subscription service. Activate by 12/31/21.
  • Count on Trip Cancellation/Interruption Insurance, Auto Rental Collision Damage Waiver, Lost Luggage Insurance and more.
  • Get up to $60 back on an eligible Peloton Digital or All-Access Membership through 12/31/2021, and get full access to their workout library through the Peloton app, including cardio, running, strength, yoga, and more. Take classes using a phone, tablet, or TV. No fitness equipment is required.
Regular APR
15.99%-22.99% Variable
Annual Fee
Balance Transfer Fee
Either $5 or 5% of the amount of each transfer, whichever is greater.
Recommended Credit

Editorial Disclaimer: Opinions expressed here are the author’s alone, not those of any bank, credit card issuer, airlines or hotel chain, and have not been reviewed, approved or otherwise endorsed by any of these entities.

Disclaimer: The responses below are not provided or commissioned by the bank advertiser. Responses have not been reviewed, approved or otherwise endorsed by the bank advertiser. It is not the bank advertiser’s responsibility to ensure all posts and/or questions are answered.