It’s easy to swipe a credit card – just slide the card through the slot in the machine with the stripe on the back of your card at the bottom, facing left. Or on a machine that requires you to swipe your card horizontally rather than vertically, just make it so the front of your card is facing up. Swiping a credit card isn’t the only way to complete a purchase with one, though. Most cards have chips now, which you may be asked to “dip” (or insert) into a card reader, chip-end first and facing up. Some cards also use RFID wireless technology and allow you to simply tap a reader to pay. But you still might be asked to swipe instead, depending on the merchant.
Here’s how to swipe a credit card (and more):
Swiping: With the stripe on the back of your card at the bottom and facing left, move the card through the slot on the card reader. If the machine has your card go in flat, face the stripe toward the reader and make sure the front of your card is facing up.
Inserting in a gas pump or other kiosk: The machine will have a picture on it indicating which way to put your credit card in. It may be horizontally or vertically. Just make sure to position the stripe on the back of your card as it is in the picture.
Inserting into a chip reader: Stick the chip end of your card into the slot on the reader, with the front of your card facing upward. Leave it in until the machine tells you to take it out.
Tapping an RFID reader: If your card has RFID wireless capability and the merchant has an RFID reader (ask at checkout), you can simply tap your card on the reader when prompted. Few RFID credit cards are available. Capital One Savor is a notable example.
Most new credit cards use chip technology. But even if your card has a chip, you won’t always have to insert it. Some merchants still ask customers to swipe. In those cases, you may have to sign a screen or receipt to complete the transaction.
When you use a credit card for the first time, the key is to spend within your means and pay the bill on time and in full every month in order to build credit history and avoid expensive interest charges. If used responsibly, a credit card can be a powerful tool that saves you money in rewards and interest down the road. If you’re reckless with it, however, you may wind up facing credit score damage and debt that could take years to get under control.… read full answer
Given that how you manage your first credit card will dictate your future credit card and loan options, as well as help determine how good your credit score is, it’s important to use your card as a good first step in your credit-building journey. Fortunately, that doesn’t have to be too complicated.
How to Use a Credit Card for the First Time
Use the credit card on a regular basis. Making a manageable amount of purchases from time to time will give you the opportunity to develop a habit of paying your bill in-full and on-time. Plus, account activity is one of the factors card issuers will look at when you ask for a credit limit increase. If you use your card regularly and responsibly, you’re more likely to get a credit line increase when you request one.
Always pay the monthly bills on time. When you use a credit card for the first time, starting out with timely payments is critical to avoiding interest charges and building a good credit score. A payment that is a day late is still a late payment, so try to pay several days before the due date. Setting up automatic monthly payments from a checking account can be very helpful.
Pay off the entire balance every month. Paying in full every month is a good habit to get into, leading to long-term credit score gains and allowing you to avoid being charged interest on your purchases. Plus, a credit card that you use for the first time will likely have a low credit limit, and a balance reduces your available credit.
Maintain low credit utilization. You’ll want to keep your balance-to-credit limit ratio below 30% on the first credit card you use, and all future credit cards. If you have to make an unexpected purchase that will take a chunk out of your credit limit, pay it off as soon as you can – even before the bill comes due.
Using your first credit card responsibly can be a tall order for some people. But once you’ve mastered it, consider the hard part out of the way.
On the other hand, if you’re nervous about the actual mechanics of using your new credit card for the first time at a store or online, try not to be. There will be lots of prompts throughout the process that will tell you exactly how to use your credit card.
Finally, as you continue to use your first credit card and build your credit history, be sure to monitor your account for any suspicious activity by checking your monthly statements for unauthorized transactions. It’s also important to never give out your credit card information or PIN over the phone, unless you are calling the issuer’s customer service department directly. And, to keep your sensitive information extra-safe, memorize your passwords and PINs, or write them down and keep them in a secure location.
Credit cards work based on a buy-now-pay-later arrangement with the cardholder, with fees and interest supporting the cost of lending. When you use a credit card to make a purchase, you’re borrowing money from the credit card’s issuer to complete the transaction, and then repaying the amount at the end of the billing cycle, either in part or in full. By paying the bill in full each month, you’re essentially borrowing money for free, because you will be avoiding interest charges. If you can’t pay your balance in full, at least make the minimum payment required by the due date. Interest will be applied to the remaining balance, but you won’t damage your credit score.… read full answer
Credit cards also work for transactions other than purchases, including balance transfers and cash advances, which have the potential to be even more profitable for issuers. Balance transfers give people the chance to repay existing debt with a lower interest rate, for a fee – usually 3% to 5% of the transferred amount. Cash advances let you withdraw cash from your credit line, but a high fee and interest rate apply right away.
How Credit Cards Work:
Credit cards allow users to buy now and pay later, even over the course of months.
Credit cards enable cardholders to build credit, unlike debit cards.
Some credit cards reward cardholders for making purchases. Some cards charge annual membership fees.
If cardholders don’t pay their full balance by the due date each month, interest charges are added to the balance each day.
Credit card approval depends on an applicant’s overall creditworthiness. Credit history, income and debt obligations are important factors.
How Credit Card Rewards Work
Many credit cards reward cardholders with cash back, points or miles for every purchase made. Plus, the best credit cards often come with signup bonuses that cardholders can earn after meeting a minimum spending requirement in the first few months. Some credit cards offer low introductory interest rates, too.
This isn’t charity, though. Credit cards offer short-term borrowing and give rewards because it’s profitable for credit card issuers. If a cardholder decides to pay off a credit card balance over time, they’ll have to pay interest. And if they have the chance to earn rewards, they’re likely to spend more than they would otherwise.
Building Credit with Credit Cards
Generally, the credit cards with the best rewards, rates, and benefits go to people with high credit scores, a lot of income, and little-to-no debt. But if you’re new to credit, credit cards are the best credit-building tools around. As long as you use the card responsibly and pay the bill on time every month, or never make purchases with the card at all, the issuer will report positive information to the credit bureaus each month. Plus, it’s very easy for someone with no credit to get a credit card, especially a secured card where your credit limit is based on how much you put down as a security deposit.
WalletHub Answers is a free service that helps consumers access financial information. Information on WalletHub Answers is provided “as is” and should not be considered financial, legal or investment advice. WalletHub is not a financial advisor, law firm, “lawyer referral service,” or a substitute for a financial advisor, attorney, or law firm. You may want to hire a professional before making any decision. WalletHub does not endorse any particular contributors and cannot guarantee the quality or reliability of any information posted. The helpfulness of a financial advisor's answer is not indicative of future advisor performance.
WalletHub members have a wealth of knowledge to share, and we encourage everyone to do so while respecting our content guidelines. Please keep in mind that editorial and user-generated content on this page is not reviewed or otherwise endorsed by any financial institution. In addition, it is not a financial institution’s responsibility to ensure all posts and questions are answered.
Ad Disclosure: Certain offers that appear on this site originate from paying advertisers, and this will be noted on an offer’s details page using the designation "Sponsored", where applicable. Advertising may impact how and where products appear on this site (including, for example, the order in which they appear). At WalletHub we try to present a wide array of offers, but our offers do not represent all financial services companies or products.