Guidelines For First Time Credit Card Users

If you, or someone in your family is just beginning to use a credit card, there are several things you, or they, should know. Be sure you, or your child, become a responsible credit card user.
A “first” credit card can be exciting, tempting and intimidating.  If you are getting your first credit card (or your child is getting his/her first card), here are some ideas to keep in mind.

1.      A credit card is serious business.  The issuing company is lending you money and you have responsibilities.

2.      One card is probably enough.  Avoid extra temptation by only having one card.

3.      Keep the credit limit low.  Depending on how you are going to use it, $500 or $1000 is high enough for most first-time credit card users.

4.      Pay off the entire balance each month.  Avoid interest charges and build a good credit record. Payments on Farmers & Merchants Bank credit cards can be made at any branch, on-line or by mail.

5.      Make the payments on time.  This helps build a good record and avoids late payment charges. Payments made at our branches by 5 pm weekdays, post that same day so there is no delay caused by mailing it.

6.      Use the card for emergencies.  Start off slowly with this new convenience.  Keep using cash and checks for most purchases, especially until you get comfortable with the card.

7.      Never let others use your card.  You are responsible for all charges on your card.  Don’t let others borrow it or give out the number.

8.      Keep track of your use of the card and compare your records to what shows up on the monthly statement.  Local customer service is provided if you should ever have the need.

9.      Keep the card active.  Even if you are only using the card for emergencies, use it for small purchases every three or four months just to keep it active.  Then be sure to pay off the balance before any interest is due.

10.  Avoid using the card for cash advances.  The interest rate charged for advances is usually high and interest is charged immediately.  Unlike other credit card issuers, Farmers & Merchants Bank charge the same low rate on both cash advances and purchases.

11.  Create a spending and budget plan.  Don’t let your credit card payments exceed 20% of your monthly income.

12.  If having a credit card turns out to be a problem, get rid of it or stop using it for a while.

Here are some other things to keep in mind about your credit card.

·         The credit card companies make money by charging interest on long-term balances.  Often the rates they charge are relatively high.  Farmers & Merchants’ card has a fixed rate that hasn’t changed in years.

·         Choose a card that fits how you are going to use it.  Probably for a first time user, find a card that has low (or no) annual fees and low interest rates.  If you are not going to use it much, the benefits (airline miles or gifts) won’t compensate for the fees usually found with these types of cards.  We never charge annual fees.

·         Having a good credit record is important.  Those with good records usually find that getting credit is easier and they often qualify for lower rates on their borrowing.

·         Investigate the details of the card thoroughly.  Be sure to understand all the fees and how interest charges are calculated.

Farmers & Merchants Bank offers a VISA card with no annual fee – and you earn ScoreCard Rewards Points with every purchase you make! We’ll be glad to help you get started with an application. Click here to learn more about the benefits of our card.