• Credit cards offer protection against theft of your cash.
• You can buy items and services you need when you need them, even if you don’t have enough cash for them.
• Credit cards can be lifesavers, and your parents may want you to carry a credit card to pay for gas, repairs, emergency phone calls, etc.
• Managing your credit cards well can build up a solid credit history for the future.
• If you can use credit responsibly, you’ll end up a smarter money manager.

• Credit cards make it very easy to buy things that are out of your league, to the point where you can’t pay the bill when it comes due.
• When you carry a credit card, it’s tempting to buy on impulse and forget you’re actually spending money, or that you’re spending future income that you don’t have (and may never have!).
• If you only pay the minimum balance each month, it will take years to pay off the balance, and accumulating interest on that balance can make what you bought cost much, much more in the long run.
• If you fall behind on paying your credit card bills, it can damage your credit rating and make it harder for you to get loans in the future.

You must be 18 years old and have some kind of income in order to get a credit card in your own name. There are alternatives, however:

• Have a parent or legal guardian request a supplemental card for one of their accounts. Your name will be on the card, but all charges will be billed to their credit card account.
• Have a parent or legal guardian cosign your credit card application. If you can’t pay the bill at any point, your co-signatory will be responsible for handling the account.
• Open a savings and/or checking account at a bank or credit union, and agree to maintain one month's credit limit in a savings account. Then if you do not pay your monthly payment, the bank will remove the money from your account.

Most credit cards provide "unsecured" credit, which means that they are lending you money based on your promise pay back the debt. Credit cards come in several varieties:

• Travel and Entertainment cards, such as American Express or Diner's Club. These are primarily used by businesses and consumers for travel and entertainment expenses and have an annual fee.
• Bank cards, such as MasterCard, Visa, and Discover. These credit cards are sponsored by individual banks and can be used to pay for any types of goods and services. Each bank decides credit limits, annual fees, terms and conditions.
• Company or Retail Store cards, for department stores and gas stations, can only be used at the retailer who issues them. They have no annual fee, but may have a higher interest rate than bank cards.

The way you handle your credit cards affects your credit history; a negative credit history is a serious liability. Credit bureaus keep track of your history and assign you a "credit rating", which can be accessed—usually within minutes-- by employers, insurance companies, and apartment managers. If you have a poor credit rating because of a bad credit history, this can keep you from getting things you want, like an apartment or an insurance policy. So as soon as you receive, sign, and use that credit card for the first time, your responsibilities have started. Take time to read through the terms and conditions that come with a credit card account, and become familiar with what’s expected of you.

As soon as you turn 18, the credit card companies will start to "woo" you to open an account. So you’ll likely be bombarded with offers, but choosing the right card isn’t as simple as picking the best bonus gift or introductory interest rate. Look on the back of the offer to review the interest rates, annual fees, late charges, etc. that each card offers. Your safest bet is to sign up for a card that requires you to may the least amount of interest—especially after the introductory rate.

Here’s how to decode the terms:

Annual Fee: This is basically a membership fee for having this credit card account. It will range from 0 (no annual fee) to upwards of $50.

Annual Percentage Rate (APR): The interest rate, expressed per year, applied to your purchases.

Finance Charge: The total amount that you pay to use your credit, which includes interest and any other charges related to the transaction. The credit card company will use one of three methods for calculating the finance charge:

Grace Period: The number of days you have before a credit card starts charging you interest on your new purchases. Most credit cards have a 30-day grace period. If you pay the balance before the grace period, you won’t be paying any interest on it.

Transaction Fees: Any charge other than a purchase usually carries an extra fee, such as a cash advance, late payment, or going over your credit limit. Some credit cards even charge a monthly fee if you haven’t used your card at all.

• Look for a low interest rate but remember that the interest rate is not fixed; it may change in the future.
• Look at how they calculate finance charges.
• Look at all charges and costs. Some companies will add other fees, such as late payment fees if your payment arrives after the due date, or transaction fees every time you use the card.
• Look at grace periods, and try to choose a card that starts the grace period on the day the purchase is posted to your account, not on the actual day of purchase.
• Keep an eye out for extra services and features available. Many cards offer extended warranties, insurance, and rebates. These are great as long as you will use them and won’t cost you extra.

Read each credit contract carefully, be sure you understand all the terms, costs and conditions. The credit card company will give you a credit limit, but don’t pay attention to that! Look at your own finances and decide what you can handle as a limit. As your credit history with a card increases, the company will likely increase your credit limit. This should still not affect the way in which you use the card.

All in all, look for the deal that best fits the situation you’re in; as you build a good credit history and your income grows, you’ll qualify for better rates in the future.

Every time you purchase something with a credit card, you’re entering into a legal agreement with the credit card company, and this is a serious responsibility. Here are some other responsibilities to keep in mind:

• Always keep your cards with you or in a safe place
• Never give your credit card number to friends
• Before signing a receipt, check to see that it’s accurate Destroy all carbon copies Keep all receipts to check against the billing statement
• Notify the credit card company immediately if you lose your credit card
• Get familiar with the consumer credit laws that protect you