So many millennials have declined credit cards for fear of incurring huge interest debts and blowing up their budgets. They are not too familiar with how credit cards work and fear to get into financial trouble.

However, these reasons should not stop every 20-something year old from paying with plastic money. With a straightforward spending discipline, youngsters can benefit from credit cards. The following are 10 tips and tricks to help you navigate.

1. Observe due dates strictly

How financially savvy are you in the eyes of lenders? Your credit history says a lot about you. Whenever you apply for credit to make a big purchase, your credit score comes under great scrutiny. Examples of these purchases are home loans and car loans. Even if you don’t intend to buy these in the near future, keeping excellent credit scores is good practice.

2. Talk to your creditors

Creditors will report you to the credit bureaus every time you default on a payment or when you pay late. Note that a day late means a lot to your statement. Derogatory information can stay up to 7 years on your credit score. Try your best to avoid these damaging situations.

Talk to your first credit card issuer when you think you will run late on a payment. They may just waive penalties. Take advantage of budgeting apps to track purchases, remind and keep you updated with payments.

3. Manage the credit to debit ratio

Many millennials run up their credit cards too close to the limit. This causes banks and other lending institutions to slow down on their approval of your credit facilities. In simple terms, they compare your debt to your overall credit limit.

If you max out on your credit card, financial institutions deem you as an irresponsible spender. What can you do to ensure that your credit debt ratio is healthy? Charge only what you are able to settle in full per month.

4. Take advantage of rewards

Credit cards appeal to so many people because of the extra bonus, benefit, and discount that they bring. Examples of these cashback rewards are spending points, redeemed merchandise, gift cards and redeemed hotel, flights, fuel points, and other goodies.

5. Invite friends to apply

Credit card issuers will offer generous benefits when and if you share an invite code to your friends to sign up. Millennials can use their influence to accumulate handsome cashback bonuses and freebies here and there. Redeeming these helps you understand better how credit cards work.

6. Negotiate with your issuer for a higher limit

Many millennials make the mistake of spending too much on their credit line. There is one thing you can do to reduce the deficit. Simply call your first credit card issuer, and ask for a higher limit. Next, work hard to pay what you already owe.

Good credit to debit ratio is around the regions of 30%. Keeping it low does two things. Firstly, it helps you maintain a healthy credit score. Secondly, it enables you to avoid too much debt that you cannot handle. This is, in essence, the goal of every credit card owner.

7. Avoid too many credit cards

You have started using your first credit card and are getting the hang of it. One common pitfall is to apply for a second one, and then a third one. This is perhaps the commonest pitfall among millennials who own credit cards.

Opening numerous credit cards can hurt your financial status in a couple of ways. Firstly, it may cause a serious dent in your credit score. You see, each lender tracks every purchase you make and this goes into your report and eventually eats into your credit score.

8. Avoid spending outside your ability

There are so many credit card issuers dangling the proverbial carrot to the millennials. These are seemingly inexpensive at the beginning. Are you already struggling with student loans and keeping up with basic budgets? Avoid credit cards that may affect your credit utilization ratio.

Limit yourself to the best credit card that best suits your financial interests. This helps in keeping credit low while safeguarding your finances at the same time. Credit cards should only be used for purchases that are absolutely necessary.

9. Read and understand terms of use

Many millennials overlook the terms and conditions provided by credit card issuers before they even sign up. They may be written in fine print, but these are the charges, fees, penalties, and interests that eat into your financial ability.

10. Co-sign your credit card with a friend

Is your credit history and score so poor that you cannot qualify for lending? Consider co-signing with a friend, sibling, parent or other persons who have impressive scores. If their income and credit history is favorable, you will enjoy higher bonuses, rewards and cash backs.


Credit cards are not a reserve of the middle class. Just like changing technology, millennials can benefit from a favorable first credit card. Before you sign up, understand how, when and what you will part with in exchange for the credit facilities on offer.